CBN increases IMTO license application fee from 500k Naira to 10 million Naira, and in the process, ban fintechs from offering the said service. The agency also announced a new minimum operating capital requirement for international Money Transfer Operators (IMTOs) of $1 million for foreign companies.
CBN Increases IMTO License Application Fee
Following a significant policy shift, the commercial bank regulator has announced intentions to abolish the initial cap on exchange rates offered by International Money Transfer Operators (IMTOs), opting instead to let the forces of supply and demand determine the rates moving forward. This adjustment is part of a broader strategy to liberalize the foreign exchange market and enhance the efficiency of remittance inflows in the country.
The Revised Operational Guidelines for IMTOs in Nigeria
In a recent document, signed by Hassan Mahmud, Director of the Trade and Exchange Department, and circulated on Thursday, January 31, 2024, the central bank outlined the revised operational guidelines for IMTOs in Nigeria. Under these new rules, entities interested in providing international money transfer services are required to apply directly to Mahmud in Abuja, undergoing a two-tier approval process that includes an initial or approval-in-principle (AIP) and subsequent final approval.
Applicants must meet stringent requirements, including possessing a minimum share capital of $1 million and paying a non-refundable application fee of ₦10 million. Additionally, they are to provide proof of tax compliance and submission of incorporation documents among other prerequisites. Receiving an AIP does not permit the commencement of operations; it is merely a precursor to obtaining the final approval, contingent upon fulfilling further documentation as stipulated in the guidelines.
IMTOs Are Obligated To Pay an Annual Renewal Fee Of ₦10 Million By January 31 Each Year
Upon receiving final approval, IMTOs are obligated to pay an annual renewal fee of ₦10 million by January 31 each year to maintain their operational status. Failure to comply may result in the withdrawal of approval.
The Central Bank of Nigeria’s Stance on the New Development
Moreover, the Central Bank of Nigeria (CBN) mandates that all sanctioned IMTOs rigorously adhere to the established regulations against anti-money laundering (AML), combating the financing of terrorism (CFT), and countering the proliferation financing of weapons of mass destruction, ensuring that their operations contribute to the financial security and integrity of Nigeria.
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