International money transfer services are no longer allowed for banks and financial technology businesses (fintechs) according to an order issued by the Central Bank of Nigeria (CBN).
The application fee for licensing International Money Transfer Operators (IMTOs) has increased dramatically by 1,900% in conjunction with this move.
A CBN memo dated Wednesday, January 31, 2024, revealed the apex bank’s decision and included the updated parameters for IMTO activities.
“All banks are prohibited from operating International Money Transfer services but can act as agents,” the document partly reads.
It further stated that fintech companies cannot receive permission from the IMTO.
The rules additionally restrict hiring of IMTOs in accordance with the Bank and Other Financial Institutions Act (BOFIA) 2020.
The 2014 standards, which exclusively prohibited deposit money institutions from using these services, are expanded upon in this version to cover fintech companies.
In addition, the CBN increased the IMTO licensing application price from N500,000 to N10 million, which is a notable rise over almost a decade.
In order to operate in Nigeria, prospective IMTOs must now apply to the Director of the Trade and Exchange Department and pay a non-refundable charge of N10 million.
The paper specified a number of requirements, including evidence of tax clearance, authorization to operate in other jurisdictions, and incorporation documentation for indigenous IMTOs, in order to be considered for the application.
The document read, “A non-refundable application fee of N10,000,000.00 (Ten Million Naira only) or such other amount that the Bank may specify from time to time and payable to the CBN through electronic transfer or bank draft,” the document read.
“Approval to operate in other jurisdictions or agency agreement (for all IMTOs).”
“Evidence of tax clearance and incorporation documents in Nigeria (for indigenous IMTOS) to include Memorandum and Articles of Association (Certified True Copy), of which the primary object clause shall indicate provision of money transfer services.”
IMTOs will be required to pay an annual renewal charge of N10 million, or as determined by the CBN, in addition to the application fee. This fee must be paid by bank draft or electronic transfer by January 31 of each year.
