CBN Bans Foreign Currency Cash Deposits In Nigeria

The Central Bank of Nigeria (CBN) has officially barred banks in the
country from accepting foreign currency cash deposits into customers'
domiciliary accounts.


The directive was contained in a circular issued by the CBN on
Wednesday and signed by the director of trade and exchange, Olakanmi
Gbadamosi.
The CBN, in the circular, the central bank explained that its action
is in tandem with have decision of banks that have notified their
customers that they would no longer accept foreign exchange cash
deposits from them.
The apex bank also advised those who have deposited foreign currencies
into their accounts before the directive to either withdraw the cash
as they will not be allowed to transfer the funds.
The circular reads in part: "The Central Bank of Nigeria has
considered the recent statements by Deposit Money Banks (DMBs)
concerning the large volume of foreign currencies in their vaults and
the decision to stop accepting foreign currency cash deposits into
customers' domiciliary accounts as a welcome development.

"Therefore, in its continued efforts to stop illicit financial flows
in the Nigerian banking system which aligns with the anti-money
Laundering stance of the Federal Government, the CBN hereby prohibits
from the date of this circular the acceptance of foreign currency
cash deposits by DMBs.
"For foreign currency cash lodgments made prior to the date of this
circular, the account holder has the option to either withdraw his or
her foreign currency cash or the Naira equivalent. For the avoidance
of doubt, only wire transfers to and from Domiciliary Accounts are
henceforth permissible.
"The CBN advises individuals that wish to source foreign currency for
eligible and legitimate purposes such as BTA, PTA medical, mortgage,
school fees, goods etc. to do so through recognized channels with the
use of Form 'A' for "invisible" and Form 'M' for "visible"
transactions."
Before now, some banks including Fidelity Bank Plc, Guaranty Trust
Bank Plc and Standard Chartered Bank, have already informed their
customers they were going to stop receiving foreign currency cash
deposit due to "lack of available foreign exchange cash outlets."
The naira had appreciated against the dollar signifcantly after banks
started denying their customers opportunity to make cash deposits of
dollar, pound and euro into their domiciliary accounts.
It was also anticipated that the US dollar will further tumble against
the naira at the parallel market this week as Deposit Money Banks
continue to reject cash deposit of foreign currencies into customers'
domiciliary accounts.
However, the naira fell N235 to US$1 in the parallel market on August
4, despite appreciating to N209 barely 24 hours earlier.

Reacting to this development, foreign exchange dealers were hopeful
that the naira would still appreciate again against the dollar at the
black market.

--Daily Independent