The Central Bank of Nigeria (CBN) on Wednesday insisted on USD1,000.00 or its equivalent per quarter as allowable limit of International Money Transfer Operators (IMTO) outbound money transfer per transaction per person in the 2019 fiscal year, subject to review from time to time.
This was stated in the Monetary, Credit, ForeignTrade and Exchange Policy Guidelines For Fiscal Years 2018/2019, released on Wednesday by the CBN.
The guidelines says authorised Dealers shall utilize interbank funds strictly for funding of Letters of Credits, Bills for Collection and other invisible transactions, subject to appropriate documentation as provided by extant regulation.
Authorised dealers in foreign exchange are expected to utilize interbank funds strictly for funding of Letters of Credits, Bills for Collection and other invisible transactions, subject to appropriate documentation as provided by extant regulation.
On Capital Adequacy Ratio (CAR), the regulator insisted that The minimum ratio of total qualifying capital to total risk-weighted assets shall remain at 10.00 per cent for Regional and National banks, and 15.00 per cent for International banks in the 2018/2019 fiscal years. Not less than 66.67 per cent of banks’ capital shall comprise paid-up capital and reserves.
Banks shall also maintain a ratio of not more than one to ten (1:10) between adjusted capital funds and total credit net of provisions. They are encouraged to maintain a higher level of capital commensurate with their risk profile.
The CBN said Open Market Operation (OMO) shall remain the major liquidity management tool and shall be complemented by discount window operations, including repurchase agreements (repo) and reverse repurchase agreements (reverse repo).
According to the guidelines, the Net Open Position (NOP), long or short, of the overall foreign currency assets and liabilities taking into cognizance both on and off-balance sheet items shall not exceed 10.00 per cent of shareholders’ funds unimpaired by losses.
Banks are expected to adopt the certain risk mitigation strategies, which include all borrowings to be hedged using financial market tools acceptable to the CBN; borrowings must be subordinated debts with prepayments allowable only at the instance of the bank and subject to prior approval of the CBN; and all debts, with the exception of trade lines, shall have a minimum fixed tenor of five years.