Diaspora remittance: CBN approves naira payout to recipients

July 13, (THEWILL) – The Central Bank of Nigeria (CBN) has approved Naira payouts for diaspora remittance with immediate effect, thus ending a ban that had been in place since 2020.

In a circular dated July 10, 2023, and signed by Director, Trade & Exchange Department, Dr. O.S. Nnaji, the CBN said it has approved the payment of the Naira to beneficiaries of diaspora remittance through the International Money Transfer Operators (IMTOs).

Part of the CBN’s circular said, “The Central Bank of Nigeria hereby announces Naira as a payout option for receipts of proceeds of International Money Transfers.

“Accordingly, all recipients of diaspora remittances through the CBN approved IMTOs on the attached list shall henceforth have the option of receiving Naira payment in addition to USD and eNaira as payout options.

“For the avoidance of doubt, International Money Transfer Operators are required to pay the proceeds using the Investors’ & Exporters’ Window rate as the anchor rate on the day of the transaction.”

The circular implies that banks and IMTOs can now pay their recipients in Naira, ending a three-year ban since 2020.

It could be recalled that in December 2020, the CBN banned banks and IMTOs from paying recipients in Naira. The policy also stated that only banks could transfer funds onward to recipients.

In theory, the CBN policy ended the business model of many digital remittance companies that allowed Nigerians abroad to send money directly to the Naira accounts of recipients.

Months after the “Naira payment ban,” the CBN introduced the Naira for Dollar Scheme in March 2021.

These policies were part of the apex bank’s attempts to encourage diaspora remittances to move through formal channels and boost FX liquidity.

The new policy shift is another step towards loosening the strict control the CBN has exercised over FX rates in the last five years as it now allows customers to choose between receiving their funds in foreign currency, eNaira and the Naira.

The CBN’s circular entitled ‘Payout Option in Naira for Receipt of Proceeds of Diaspora Remittances’ also updated the list of registered IMTOs in Nigeria from 47 in 2021 to 62.