The Central Bank of Nigeria (CBN) has directed Deposit Money Banks (DMB) to provide bank gurantees to Nigeria Bulk Electricity Trading (NBET) and Transmission Company of Nigeria (TCN) on behalf of Distribution Companies (DISCos).
The CBN gave the directive in a letter written to DMBs in Abuja on Tuesday.
The bank explained that the DMBs would take full responsibility for the collection of the concerned DISCos and the remittances of the DISCos to both NBET and TCN.
“For the avoidance of doubt, no DMB is permitted to open or continue to maintain a collection account for a DISCo without the express no-objection of the DMB that gurantee its exposure to NBET or TCN.
“The payment or settlement of all Nigerian Electricity Supply Industry (NESI) related goods or services shall be made through the Nigerian Banking System.
“Consequently, all collections for the payments of NESI regulated goods and services provided by a DISCo shall be paid into a designated account such that collection arrising from services rendered by the DISCo shall be paid into an account in the so name of the DISCo.
“Also, collections arising from the services rendered by a third party or parties on behalf of the DISCo shall be paid into an account in the joint name of the DISCo and the third party vendors.
“All energy and non energy collections of DISCos whether cash or cashless shall only be performed by DMBs,” the letter explained.
Meanwhile, the apex bank has directed all banks in the country to submit the names, addresses and Bank Verification Numbers (BVN) of exporters that have defaulted in repatriating their exports proceeds for further action.
The directive was issued by CBN Governor, Mr Godwin Emefiele, during the bi-monthly virtual meeting of the Bankers’ Committee on Tuesday.
Emefiele said this step was part of the bank’s effort to increase foreign exchange liquidity in the country.
This durective came barely 24 hours after the Bank announced the abolition of third-party “Form M” payment.
In a circular signed by its Director of Trade and Exchange, Dr Ozoemena Nnaji, the bank had also explained that the directive was aimed at ensuring prudent use of Nigeria’s foreign exchange resources and the elimination of incidences of over-invoicing.
According to the circular, the directive will also address transfer pricing, double handling charges and avoidable costs that are ultimately passed to the average Nigerian consumer.
The circular noted that the move by the CBN followed the adoption of the strategy to discourage over-invoicing, which some businesses had allegedly used to divert foreign exchange from the country, through the opening of “Forms M” for which payment were routed through a buying company, agent, or other third parties.
CBN, in the past, had warned exporters conducting export activities against diverting foreign exchange from the export proceeds, instead of repatriating same home.
The Bank, however, in collaboration with the Bankers’ Committee, had threatened heavy sanctions against exporters who failed to repatriate foreign exchange proceeds from their international business.
The CBN noted that its Foreign Exchange Manual provided that all exporters should repatriate export proceeds back to the country to support the local currency and boost the economy.
