CBN Bans Banks, Fintechs From International Money Transfers, Increases Application Fee

The Central Bank of Nigeria (CBN) has issued a directive that banks and financial technology companies (fintechs) are no longer permitted to engage in international money transfer services.

This change comes alongside a dramatic increase in the application fee for licensing International Money Transfer Operators (IMTOs) by 1,900%.

The apex bank’s decision was disclosed in a CBN document dated Wednesday, January 31, 2024, which also outlined the revised guidelines for IMTO operations.

“All banks are prohibited from operating International Money Transfer services but can act as agents,” the document stated.

Additionally, it specified that fintech companies are ineligible for IMTO approval.

The guidelines further extend employment prohibitions, as outlined in the Bank and Other Financial Institutions Act (BOFIA) 2020, to IMTOs.

The revision expands on the 2014 guidelines, which only restricted deposit money banks from these services, to now include fintechs.

Furthermore, the CBN has escalated the application fee for IMTO licensing from the previous N500,000 to N10 million, marking a significant increase over nearly ten years.

Prospective IMTOs seeking to operate in Nigeria are now required to submit applications with a non-refundable fee of N10 million to the Director, Trade and Exchange Department.

The document listed several prerequisites for the application, such as approval to operate in other jurisdictions, evidence of tax clearance, and incorporation documents for indigenous IMTOs.

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.”

In addition to the application fee, IMTOs will be subject to an annual renewal fee of N10 million, or as specified by the CBN, to be paid via electronic transfer or bank draft by January 31 each year.