The Central Bank of Nigeria (CBN) has directed commercial banks to conduct Know Your Customers’ Businesses (KYCB) to ensure customers do not transact illegal or illicit remittances through the banking industry.
The CBN gave the directive to authourised dealers, mainly banks, on Friday in a circular signed by the Acting Director of Trade And Exchange Department, Mr W.D Gotring and titled, “Illicit international money remittances through the banking system’’.
The apex bank had observed that some Deposit Money Banks (DMBs) were operating accounts either as companies or masking themselves as individuals for the purpose of illegally receiving money transfer flow.
They then claimed to onward disburse such funds to recipients in the country.
The CBN had directed the commercial banks to identify and freeze those accounts receiving illicit flows.
It also directed them to submit mandate and account details of such accounts held in foreign and local currencies to the CBN.
The apex bank said that the development would allow easy onward reporting to the security agencies.
In July, the CBN lifted the ban on sales of foreign currency proceeds of International Money Transfers to bureaux de change operators.
The apex bank said that the lift would ensure the stability of the exchange rate and boost participation of all critical stakeholders in the foreign exchange market.
It directed all authorised dealers who were agents to approve International Money Transfer Operators (IMTOs) to sell foreign currency accruing from inward money remittances to licensed BDCs with immediate effect.
The bank said IMTOs were required to remit foreign currency to the agent banks for disbursement in Naira to the beneficiaries while the foreign currency proceeds shall be sold to the BDCs.
To ensure the success of the policy, CBN later certified only three international money transfer firms- Western Union, MoneyGram and Ria.
Naira soars at inter-bank market
The naira on Friday strengthened against the dollar at the inter-bank market as the parallel market remained volatile.
The Nigerian currency traded at N314.95 against the dollar in contrast with N338.75 it recorded at the transaction on Thursday.
However, at the parallel market, the naira traded at N412 to a dollar as against N407 it recorded on Thursday, and N530 to Pound Sterling and N455 against Euro, from N425 and N455, respectively on Thursday.
At the Bureau De Change (BDC) segment of the market, the naira exchanged at N407, N520 and N450 against N407, N525 and N450 it posted on Thursday.
Traders at the market said that the market had remained unstable as the directives and counter-directives of the Central Bank of Nigeria (CBN) on foreign exchange sale was affecting liquidity flow.
