The Central Bank of Nigeria (CBN) has made a significant move by prohibiting banks and financial technology companies (fintechs) from offering international money transfer services.
This development is outlined in the revised guidelines for the operations of International Money Transfer Operators (IMTOs), officially released on January 31, 2024.
According to the document, all banks are now prohibited from directly operating International Money Transfer services but may serve as agents. Similarly, Financial Technology Companies are barred from obtaining approval for IMTO services.
The guidelines also stipulate that the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020, which restrict the employment of certain persons in banks, shall apply to IMTOs. This includes individuals in management positions, shareholders, and officers of a bank.
This directive marks a significant expansion of previous regulations. While the 2014 guidelines only prohibited deposit money banks from offering such services, the updated rules now extend the ban to fintech companies as well.
The CBN’s decision is likely to have far-reaching implications for the financial services sector in Nigeria, as it reshapes the landscape of international money transfers and fintech operations.
As stakeholders digest the implications of the new guidelines, questions arise about their impact on financial inclusion, cross-border remittances, and the broader digital economy in Nigeria.
The move underscores the CBN’s efforts to tighten regulatory oversight and ensure compliance with banking regulations, reflecting its commitment to maintaining stability and integrity in the country’s financial system.