The recent guidelines aim to provide direction to IMTOs in compliance with the regulatory framework established by the CBN. While the previous guidelines in 2014 only applied to deposit money banks, the new rules now include fintechs.
What the circular says:
“All banks are prohibited from operating International Money Transfer services but can act as agents. Also, Financial Technology Companies are not allowed to obtain approval for IMTO,”
“The provisions of BOFIA 2020 on the prohibition of employment of certain persons in banks shall also apply to IMTOS.”
“In line with BOFAI 2020, all the conditions stipulating the exclusion for certain individuals from the management of banks shall apply to the management of International Money Transfers Services”
To get final approval, the central bank said any IMTO wishing to operate in Nigeria must submit its application to the Director of the Trade and Exchange Department.
Additionally, the IMTO must submit approval to operate in other jurisdictions or agency agreements, evidence of tax clearance and incorporation documents in Nigeria. Indigenous IMTOs should also include Memorandum and Articles of Association (Certified True Copy), with the primary object clause indicating the provision of money transfer services.
The CBN also increased the application fee for the IMTO licence from the N500,000 fee set in 2014 to N10 million
An annual renewal fee of N10 million Naira, or any amount that the apex bank may specify from time to time is required for the IMTO license. This fee is payable through electronic transfer or bank draft on or before 31st January of the year.
The renewal of IMTO approval is required within the first quarter of every year. If an IMTO fails to provide its agent bank with a copy of the CBN renewal of its approval for that year within the first quarter, the bank should cease any further transactions with the IMTO.
Operating capital from IMTOs
According to the circular, a minimum share capital of $1 million for foreign entities and an equivalent amount for local IMTOs is required for operation.
The previous minimum operating capital requirement for International Money Transfer Operators (IMTOs) was N2 billion for Nigerian companies and N50 million or its equivalent for foreign companies.
The bank said that compliance with the above requirements and receiving a favourable outcome would avail the applicant of an Approval-In-Principle to proceed to open bank account and process pre-operational processes.
According to the guidelines, applicants must comply with the CBN’s anti-money laundering, combating the financing of terrorism, and countering proliferation financing of weapons of mass destruction regulations.
