The Central Bank of Nigeria (CBN) has said it will sanction the International Monetary Transfer Operators (IMTOs) for breaching of foreign exchange (FX) rate pricing.

The sanctions listed by the CBN include being compelled to sell their proceeds to the Central Bank of Nigeria, suspension from operations and loss of operating license.

This was contained in a circular to all IMTOs dated September 13, 2023 and signed by W.J Kanya, for the director trade and exchange department of the CBN.

On August 9, 2023, the CBN issued guidelines to the IMTOs and a circular enumerating terms and conditions, including payment mode, pricing, and rate quote, that must be complied with while providing International Money Transfer Services.

Read also: Autonomy is great to have but the CBN should not operate unchecked – Desmond Ogba

According to the new guideline, the spread on buying and selling by BDC operators shall be within an allowable limit of -2.5 percent to +2.5 percent of the Nigerian foreign exchange market window weighted average rate of the previous day.

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The CBN said in the course of its routine checks it was observed that some IMTOs were operating and acting in breach of the circular.

The actions of the IMTOs included arbitrary rate quotes outside of permissible range and other sharp practices, in violation of extant regulations.

Read also: Explainer: Should CBN regulate banks’ FX gains?

“For the avoidance of doubt, International Money Transfer Operators are required to quote rate within the allowable limit of 2.5 percent to +2.5 percent around the previous day’s closing rate of the Nigerian Foreign Exchange Market for their transactions.

“Going forward, any IMTO in breach of this specific regulation would face sanctions, including but not limited to being compelled to sell their proceeds to the Central Bank of Nigeria, suspension from operations and loss of operating license, ” the circular reads.

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By Iheanyi Nwachukwu • September 14, 2023

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.

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