• Tuesday, May 28, 2024
businessday logo


Key changes to the revised International Money Transfer Services guidelines

Naira extends depreciation to 1,515/$ despite marginal growth in external reserves

Nigeria’s Central Bank revised the International Money Transfer Services Guidelines in January 2024. The fundamental changes include improving the Government’s reforms to increase transparency in foreign exchange market transactions, diaspora remittances, cross-border fund transfers, foreign capital inflow, ease of doing business, prudential requirements and compliance including a US$1 million or Naira equivalent authorized capital, and stringent anti-money laundering regime.


The Revised International Money Transfer Services Guidelines (the “Guidelines”) replaced the International Money Transfer Services Guidelines 2014. Of course, the Guidelines gain legitimacy from the CBN’s powers under the Banks and Other Financial Institutions Act (BOFIA) 2022 and the Central Bank Act 2027. In OGBOJA VS ACCESS BANK PLC (2016) 2 NWLR (PT. 1496), Nigeria’s Supreme Court held that CBN’s regulations, guidelines, frameworks, or directives are subsidiary legislation.

Gbenga resides and works in Canada but his family live in Lagos. The Guidelines regulate any money Gbenga sends to his family from Canada. Similarly, Adefule, a Lagos resident who creates content for a UK Regtech company, must now receive his salary under the Guidelines.

Asiegbu, whose three children are in boarding schools in the UK, cannot pay the students’ UK school fees under the Guidelines – because tuition to foreign schools is outbound international payments which is outside the Guidelines’ scope.

The Guidelines may not significantly address the World Bank’s November 2021 report that remittance costs are very high in Nigeria, at an average price of 8% of the transferred sum. The BusinessDay 9th January 2023 report affirmed that remittances in Africa’s most populous nation, Nigeria, are near a three-year low due to the forex crisis and slow global growth. Furthermore, the Guidelines categorized remittance, seen traditionally as diaspora payments to the home country, with other capital investments such as cross-border fund transfers and Nigerians and legal residents’ incomes from exported services and trades.

Highlights of Key Changes

Although the Guidelines’ introductory paragraph affirmed that it provides intending promoters of entities seeking approval for “remittances to and from Nigeria”, we note that the Guidelines apply to inbound remittances, cross-border payments, and fund transfers only.

Entry requirements: From current forex exchange rates, Nigerian entities seeking international money transfer services licence enjoy about 25% licencing fee discount from the NGN2 billion authorized capital under the 2014 Guidelines when the Naira equivalent of the increased US$1 million authorized share capital is applied.

Meanwhile, foreign companies’ minimum authorized share capital increased from NGN50 million to US$1 million. Non-refundable application fee increased from NGN500,000 to NGN10,000,000.

Licencing Process: The Guidelines introduced a phased licencing process of Approval-In-Principle (AIP) and Final Approval. The AIP enables the applicant to perform pre-approval operations, such as opening bank accounts. A holder of an AIP must submit a request for Final Approval within three months from the date the CBN issued the AIP – it cannot trade with an AIP. An IMTO must renew a Final Approval before 1st February of the following year at NGN10,000,000. Every agent must cease doing business with an international money transfer operator whose licence has expired.

AML/CFT/PF Regime: The Guidelines adopted Nigeria’s improved anti-money laundering, combating terrorism financing and proliferation of weapons of mass destruction regimes. The Guidelines implied the due diligence and know-your-customer requirements in CBN’s Guidance Notes on Politically Exposed Persons 2022 and Customer Due Diligence Regulations 2023.

Compliance: An international money transfer operator must make daily, weekly, and monthly compliance returns to the CBN, including anti-money laundering compliance reports to the Nigerian Financial Intelligence Unit. Additionally, the operator’s board of directors, management, and employees must have sound knowledge of AML/CFT/PF laws and report suspicious transactions to CBN within 24 hours.

Oversee Partnership: Nigerian international money transfer operator must obtain CBN’s prior approval for a partnership with a foreign technical partner who must have traction and reputation in its operating countries.

Agency Relationship: The Guidelines’ definition clause describes an international money transfer services agent as a suitable entity providing money transfer services using the agent’s premises, staff, or technology. Only CBN-regulated deposit money banks and Fintech companies act as agents in international money fund transfer services.

Permissible Activities: Businesses under the Guidelines include remittances, cross-border payments, and fund transfers between individuals, individuals to businesses, businesses to customers, or among companies. The Guidelines restrict outbound cross-border remittances, cross-border payments, and fund transfers.

Cash Out: All payments are in Naira only. Cash-outs are for Naira equivalent of less than US$200. An IMTO pays US$200 into the customer’s bank account or wallet.

Physical office: An international money transfer operator must have a head office in Nigeria. An IMTO reports changes in office address to the CBN. Moreover, the Guidelines impose a two-week notice for temporary office closure.

Consumer protection: Consumers enjoy enhanced complaints resolution time and greater disclosure rights under the Guidelines. Such as a 48-hour turnaround time and a week’s appeal procedure before the definite appeal to CBN’s Consumer Protection Department.


The Guidelines did not specifically address the high remittance cost the World Bank flagged in 2021. The CBN may not directly control remittance costs, inbound cross-border payments, and fund transfers because Nigerian international money transfer operators do not own every payment processing platform.

Developing local cross-border payment infrastructure and increasing global spread are twin factors that may help to reduce remittance costs.

Enwe is a partner in fintech, retail and education law at SRJ Legal