No more dollar payments as CBN directs IMTOs to open naira settlement accounts

The Central Bank of Nigeria (CBN) has directed all international money transfer operators (IMTOs) to open naira settlement accounts and route all remittance transactions through them.

This means recipients of diaspora remittances will be paid in the local currency from May, ending decades of dollar payments to Nigerians when relatives abroad send money home.

The CBN said the latest policy is aimed at deepening diaspora remittances while improving transparency, traceability, and monitoring of foreign exchange (FX) flows.

The directive will take effect from May 1, 2026, according to a circular issued on Monday and signed by Musa Nakorji, director of the trade and exchange department at the CBN.

“All IMTOs are hereby directed to open naira settlement accounts and ensure that all transactions are routed strictly through their designated settlement accounts, maintained with authorised dealer banks (ADBs) in Nigeria,” the circular reads.

The CBN said all transactions related to international money transfers, including disbursements to beneficiaries and other settlements, must be processed exclusively through the designated accounts.

According to the apex bank, IMTOs may designate existing accounts or open new ones and are allowed to operate multiple settlement accounts across different ADBs.

The regulator said such accounts “shall only be credited with remittance flows and proceeds of foreign exchange conversions by licensed IMTOs (or their agents) with authorised market participants in the Nigerian Foreign Exchange Market (NFEM)”.

The CBN also directed IMTOs to notify its trade and exchange department of all designated settlement accounts and provide updates when necessary.

To enhance market efficiency, the bank said the ADBs may process foreign currency transfers from IMTO settlement accounts to other authorised dealers and approved participants, including bureau de change (BDC) operators.

On pricing, the apex bank instructed IMTOs to benchmark their rates against real-time market prices on Bloomberg’s BMatch platform.

“IMTOs shall observe real-time market prices from the Bloomberg BMatch and utilise this as guidance for pricing transactions with their customers and authorised dealers,” the CBN said.

The bank said the move would improve price discovery, reduce information asymmetry, and encourage participation in the official FX market.

The regulator also reminded the IMTOs to comply with anti-money laundering, combating the financing of terrorism, and counter-proliferation financing (AML/CFT/CPF) requirements, while maintaining proper records for audit and regulatory review.

The CBN said the directive forms part of ongoing efforts to strengthen the remittance framework introduced in its revised guidelines for international money transfer services issued in January 2024.(TheCable)