The Central Bank of Nigeria (CBN) has introduced new guidelines concerning foreign currency deposits by deposit money banks (DMBs).
The directives, aimed at enhancing liquidity in the foreign exchange market, were detailed in a circular signed by Solaja Olayemi, acting director of the currency operations department, on Friday.
According to the circular, banks are required to transfer all excess foreign currency notes to CBN branches in Lagos or Abuja. Each bank is permitted a maximum deposit of $10 million daily for $100 and $50 notes.
“In order to deepen the foreign exchange market, boost liquidity and attain convergence in the exchange rates of the parallel and official markets, the Central Bank of Nigeria (CBN) has approved that DMBs may deposit their excess foreign currency notes with Lagos and Abuja branches of the Bank,” stated the CBN.
The approval is a response to the increasing demand from DMBs to deposit their forex cash with CBN for onward credit to their offshore accounts with correspondent banks.
To ensure compliance, the CBN outlined several specific guidelines for the banks:
- Notice of Intent: Banks must give at least three working days’ notice of their intent to deposit foreign currencies. This notice must be in writing to the branch controller of CBN Lagos or Abuja and be accompanied by a list of owners of the foreign currency to be deposited.
- Deposit Limits: Deposits must adhere to daily thresholds:
- USD higher bills ($100 and $50): Maximum limit of $10 million.
- USD lower bills (20 and below): Maximum limit of $1 million.
- GBP notes: Maximum limit of £1 million.
- EURO notes: Maximum limit of €1 million.
- Presence of Bank Representatives: Two representatives of the depositing bank must be present to witness and confirm the amount being deposited.
- Denomination Requirements: Deposits may include $100, $50, $20, $10, $5, $1 denominations, as well as all GBP and EURO denominations. Each denomination must be in separate boxes.
- Registered CIT Companies: DMBs must engage only CBN-registered Cash-in-Transit (CIT) companies for the deposits of foreign currency notes.
- Deposit Timing: The time for accepting deposits is between 8am and 12pm.
CBN said Abuja and Lagos branches would receive, count and authenticate deposits in the presence of the representatives of the depositing bank on the same day.
“The bank shall credit the DMBs account through their correspondent bank within the cycle time of T+5.” the apex bank said.
“The handling charge of 0.30 per cent of the authenticated amount should be recovered from the DMB current account with CBN.
“The Bank would not accept forex deposits from any DMB that fails to comply with any of the guidelines.”
