NIGERIA: CBN to launch outbound money transfer service

AUGUST 14,2014.

Guardian News.

THE Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, as part of the key initiative of the Bank will on Friday, August 15, 2014, launch the Outbound Money Transfer Services in partnership with the Western Union Money Transfer (WUMT).

The outbound service, which is first of its kind in Nigeria, will provide Nigerians the opportunity of transferring funds up to US$2,000 to their relatives and dependents abroad (person to person transfer). With this new arrangement, Nigerians will only pay the Naira equivalent to the Money Transfer Service Operators for foreign currency disbursements to recipients abroad.

It will be recalled that the Apex Bank recently approved new Guidelines for International Money Transfer Services in Nigeria.

The apex bank had recently issued a new guideline for the regulation of International Money Transfer Services in Nigeria, a move aimed at ensuring that all business rules governing their activities are strictly adhered to.

t noted that as a preamble to the series of obligations, the operator must be ready to comply with the provisions of CBN on “Anti-Money Laundering and Combating theFinancing of Terrorism in Banks and Other Financial Institutions Regulations 2013.

According to the apex bank, the objectives of the guidelines are to provide minimum standards and requirements; specify delivery channels for (inbound/outbound), in a cost effective manner; provide an enabling environment; specify minimum technical and business requirements for various participants; and provide broad guidelines for implementation of processes and flows of international money transfer services, from initiation to completion.

The new rule holds that payment must be made to customers only in Nigerian currency, in line with CBN’s subsisting regulation and at the prevailing exchange rate on the day the transfer is received; while the operator likewise should declare in the receipt/certificate of transfer that the money paid to the customer is not counterfeited.

All the money transfer operators shall comply with the guide to money transfer charges, as provided by the CBN from time to time.

It warned that no person or institution shall provide international money transfer services unless such per has been duly licensed by the apex bank.

However, all applications for licence shall be accompanied with, among other things, a Business Plan, which will include N50 million or its equivalent for foreign companies, plus the guarantee of the parent company.

A money transfer operator, who wishes to engage a foreign technical partner that will provide global or regional payment or money transfer platform, shall obtain a letter of no objection from the CBN.

It must be a registered entity, licensed in its home country to carry on money transfer activities, with  a minimum net worth of $1 million, as per the latest audited financial statement, or as may be determined by the CBN from time to time. 

The overseas technical partner should be well established in the money transfer business, with a track record of operations and a memorandum of understanding that clearly delineates liabilities in the event of disputes and/or process failures.