Welcome to Regulations Alert! Regulatory changes can significantly impact businesses, and staying informed is key to maintaining compliance.

Here, we cover the latest updates from the Central Bank of Nigeria (CBN), including new guidelines for Bureau De Change (BDC) operators, the introduction of Non-Resident Nigerian accounts, a waiver on BDC license renewal fees, and a review of Automated Teller Machine (ATM) charges.



Let’s get into the key details:

1.    SALES OF FOREIGN EXCHANGE TO BDCs TO MEET RETAIL MARKET DEMAND FOR ELIGIBLE INVISIBLE TRANSACTIONS

Further to its circular of December 19, 2024, the Central Bank of Nigeria (‘CBN”) has released a guideline for Bureau De Change (BDCs) operators to trade on the Nigerian Foreign Exchange Market (NFEM). The guideline, which was communicated via circular dated February 5, 2025, sought to provide the modalities for BDCs who were granted prior access to the foreign exchange market to trade within the limits of a USD 25,000 weekly cap.

The key points are as follows:

• Authorized Dealers are permitted to sell foreign exchange in cash to BDCs, with a maximum of USD 25,000 per week. A BDC may only purchase this amount from one bank of its choice during the week. The CBN has emphasized that any violation of this condition will result in appropriate sanctions.
• The selling rate by Authorized Dealers to BDCs will be the prevailing rate at the NFEM window on that day of sale.
• Foreign exchange cash purchased by BDCs from Authorized Dealer Banks must be sold to foreign exchange end-users at a rate no higher than a 1% margin above the buying rate. This applies to all funds that the BDCs are retailing.
• Authorized Dealer Banks are required to submit weekly returns on sales to BDCs, following the specified Excel format, to teddmo@cbn.gov.ng.
• All BDCs must provide daily returns on foreign exchange purchases from Authorized Dealer Banks.
• Funds purchased by BDCs must only be used for eligible transactions, including Business Travel Allowance (BTA)/Personal Travel Allowance (PTA), Overseas School Fees, and Overseas Medical Fees. The maximum amount disbursed per transaction cannot exceed USD 5,000 per quarter.
• Transaction records must be maintained by BDCs, showing the BVN (Bank Verification Number) of the end user.
• Anti-Money Laundering provisions must be adhered to, and appropriate Know Your Customer (KYC) procedures should be completed for every transaction.

The CBN has also directed that any authorized dealer found diverting funds or violating the provisions of these modalities will face appropriate sanctions, including the suspension of their dealership license.

2.    INTRODUCTION OF NON-RESIDENT NIGERIAN ORDINARY ACCOUNT AND NON-RESIDENT NIGERIAN INVESTMENT ACCOUNT

Two new accounts have been created for Nigerians in diaspora to operate within Nigeria, the Non-Resident Nigerian Ordinary Account (NRNOA) and the Non-Resident Nigerian Investment Account (NRNIA). This development was announced by the Central Bank of Nigeria's Trade and Exchange Department on January 10, 2025, to facilitate the inflow of foreign exchange into Nigeria and ease the payment process in doing business.

Account Classification

The NRNOA

This enables non-resident Nigerians (NRNs) to remit their foreign earnings to Nigeria and manage funds in both foreign and local currencies.

The NRNIA

Thisaccount class allows non-residents to invest in Nigerian assets through either foreign currency or local currency accounts. Account holders can maintain both foreign currency and local currency accounts, enabling them to easily manage transactions and take part in various investment opportunities.

The CBN highlighted the benefits of these accounts as follows:

• Enhanced access for non-resident Nigerians (NRNs) to opportunities in Nigeria's economy, boosting the contribution of the diaspora community to the country's socio-economic development.
• To provide a direct and secure channel for NRNs to manage their funds, minimizing reliance on third parties.

These accounts will be operational starting January 1, 2025. Eligible NRNs can open either account by meeting specific criteria, which include holding a valid Nigerian passport, or an expired Nigerian passport, provided it is accompanied by a valid foreign passport or proof of residency, such as a residence permit. Additionally, a valid foreign passport, along with proof of Nigerian citizenship from either parent, may also be accepted. All account openings will be subject to fulfilling the Know Your Customer (KYC) requirements.

3.    WAIVER OF NON-REFUNDABLE ANNUAL LICENSE RENEWAL FEE FOR EXISTING BUREAUX DE CHANGE(BDC)

There has been significant clamour regarding the Central Bank of Nigeria's (“CBN”) directive for all Bureau De Change (BDC) operators to recapitalize. This is referring to the instruction for all BDC operators to have a minimum capital ofN2 billion for tier 1 holders and N500 million for tier 2 holders. Many BDC operators struggled to meet the initially communicated deadline, prompting the CBN to extend the recapitalization deadline from December 3, 2024, to June 3,2025, in a related development, CBN issued a circular on January 24, 2025, notifying all existing BDCs that the 2025 license renewal fee has been waived, effective immediately to accommodate these changes.

Additionally, the CBN instructed any BDC that has already paid the 2025 license renewal fee to request a refund by applying to the Director of the Financial Policy and Regulation Department at the Central Bank of Nigeria. The refunds will be processed to the account from which the payment was made.

4.    REVIEW OF AUTOMATED TELLER MACHINE (ATM) FEES

The Central Bank of Nigeria (CBN) issued a circular on February 10, 2025, announcing a review of Automated Teller Machine (ATM) fees due to rising costs and the need for greater efficiency.

In accordance with Section 10.7 of the CBN Guide to Charges by Banks, Other Financial, and Non-Bank Financial Institutions (2020), the review aims to ensure the proper deployment of ATMs and the application of appropriate charges by financial institutions.

Revised ATM Fees

           •          Withdrawals from a customer’s bank ATM – No charge

           •          Withdrawals from another bank’s ATM:

           •          On-site ATMs (located at bank branches) – ₦100 per ₦20,000 withdrawal

           •          Off-site ATMs (located outside bank branches) – ₦100, plus a surcharge of up to ₦500 per ₦20,000 withdrawal

           •          The surcharge, which serves as income for the ATM deployer/acquirer, must be disclosed to the consumer at the point of withdrawal.

           •          International withdrawals (per transaction) – Cost recovery, based on the exact charge by the international acquirer, for both debit and credit cards.

Additionally, the provision for three free monthly Remote-On-Us withdrawals (transactions by other banks’ customers at an ATM) under Section 10.6.2 of the Guide will no longer apply.

The CBN has directed banks and other financial institutions to implement these revised charges effective March 1, 2025.

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