Business
CBN directs banks to deposit excess FX to its branches
The Central Bank of Nigeria (CBN) has issued fresh guidelines on foreign currency deposits by deposit money banks (DMBs), directing them to deposit excess money to its branches.
CBN made this known in a circular signed by Solaja Olayemi, its acting director of the currency operations department on Friday.
In the circular, the apex bank directed banks to transfer all excess foreign currency notes to its Lagos or Abuja branches.
The financial regulator said this is aimed at boosting liquidity in the foreign exchange market.
According to CBN, each bank would be allowed a maximum deposit of $10 million threshold for $100 notes and $50 notes daily.
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“In order to deepen the foreign exchange market, boost liquidity and attain convergence in the exchange rates of the parallel and official markets, the Central Bank of Nigeria (CBN) has approved that DMBs may deposit their excess foreign currency notes with Lagos and Abuja branches of the Bank,” CBN said.
“The approval is a response to the increasing demand by DMBs to deposit their forex cash with CBN for onward credit to their off-shore accounts with the correspondent banks.”
The financial regulator said the banks should adhere strictly to its guidelines such as giving three days notice showing intent to deposit foreign currencies.
“Give at least three (3) working days’ notice of their intent to deposit forex cash, in writing to the branch controller, CBN Lagos or/and Abuja. This must be accompanied by the list of owners of foreign currency to be deposited,” CBN said.
“All deposits must be within the threshold of the following per day: (i) USD higher bills ($100 and $50) maximum limit of $10 million. (ii) USD lower bills (20 and below) maximum limit of $1 million. (iii) GBP notes a maximum limit of £1 million. (iv) EURO notes – maximum limit of €1 million.
“Two (2) representatives of the depositing bank must be present to witness and confirm the amount to be deposited.
“Deposits may be in $100, $50, $20, $10, $5, $1 and all GBP and EURO denominations. Each denomination shall be in separate boxes. The DMBs shall engage the services of only CBN-registered CIT companies for deposits of foreign currency notes.
“The time for accepting deposits shall be between 8am and 12pm.”
CBN said Abuja and Lagos branches would receive, count and authenticate deposits in the presence of the representatives of the depositing bank on the same day.
“The bank shall credit the DMBs account through their correspondent bank within the cycle time of T+5.” the apex bank said.
“The handling charge of 0.30 per cent of the authenticated amount should be recovered from the DMB current account with CBN.
“The Bank would not accept forex deposits from any DMB that fails to comply with any of the guidelines.”
On September 12, 2023, the CBN asked banks to stop utilising gains from the revaluation of the naira to pay dividends or finance operations.