CBN Officially Bans Foreign Currency Cash Deposits In Nigeria | Independent Newspapers Limited
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CBN Officially Bans Foreign Currency Cash Deposits In Nigeria

Posted: Aug 6, 2015 at 6:25 am   /   by   /   comments (0)

By Sola Alabadan, Lagos

The Central Bank of Nigeria (CBN) has officially barred banks in the country from accepting foreign currency cash deposits into customers’ domiciliary accounts.
The directive was contained in a circular issued by the CBN on Wednesday and signed by the director of trade and exchange, Olakanmi Gbadamosi.
The CBN, in the circular, the central bank explained that its action is in tandem with have decision of banks that have notified their customers that they would no longer accept foreign exchange cash deposits from them.
The apex bank also advised those who have deposited foreign currencies into their accounts before the directive to either withdraw the cash as they will not be allowed to transfer the funds.
The circular reads in part: “The Central Bank of Nigeria has considered the recent statements by Deposit Money Banks (DMBs) concerning the large volume of foreign currencies in their vaults and the decision to stop accepting foreign currency cash deposits into customers’ domiciliary accounts as a welcome development.
“Therefore, in its continued efforts to stop illicit financial flows in the Nigerian banking system which aligns with the anti-money Laundering stance of the Federal Government, the CBN hereby prohibits from the date of this circular the acceptance of foreign currency  cash deposits by DMBs.
“For foreign currency cash lodgments made prior to the date of this circular, the account holder has the option to either withdraw his or her foreign currency cash or the Naira equivalent. For the avoidance of doubt, only wire transfers to and from Domiciliary Accounts are henceforth permissible.
“The CBN advises individuals that wish to source foreign currency for eligible and legitimate purposes such as BTA, PTA medical, mortgage, school fees, goods etc. to do so through recognized channels with the use of Form ‘A’ for “invisible” and Form ‘M’ for “visible” transactions.”
Before now, some banks including Fidelity Bank Plc, Guaranty Trust Bank Plc and Standard Chartered Bank, have already informed their customers they were going to stop receiving foreign currency cash deposit due to “lack of available foreign exchange cash outlets.”
The naira had appreciated against the dollar signifcantly after banks started denying their customers opportunity to make cash deposits of dollar, pound and euro into their domiciliary accounts.
It was also anticipated that the US dollar will further tumble against the naira at the parallel market this week as Deposit Money Banks continue to reject cash deposit of foreign currencies into customers’ domiciliary accounts.
However, the naira fell N235 to US$1 in the parallel market on August 4, despite appreciating to N209 barely 24 hours earlier.
Reacting to this development, foreign exchange dealers were hopeful that the naira would still appreciate again against the dollar at the black market.