Central Bank of Nigeria (CBN) Tuesday night advised Nigerians at home and in the Diaspora to beware of what it called “the unwholesome activities of some unlicensed International Money Transfer Operators (IMTOs) in Nigeria.”
In a mailed statement, the CBN said the warning had become necessary because of the activities of some unregistered IMTOs, whose modes of operation were detrimental to the Nigerian economy.
The CBN was apparently reacting to an earlier call by an online remittance provider, WorldRemit, for the urgent restoration of money transfers to Nigeria, accusing the regulator of rolling out some new rules that leave virtually all money transfer operators (MTOs) unable to provide services to the West African country.
The new rule allows only three companies – Western Union, MoneyGram and Ria – who are registered to operate as official MTOs to continue operations, following a new strategy move by the CBN.
Following the development, WorldRemit, as well as all other IMTOs, who are not registered for such functions, have been instructed by their local correspondents that transfers to Nigeria will no longer be processed and are, accordingly, suspending services immediately.
WorldRemit founder/CEO, Ismail Ahmed, described the move as arbitrary, inexplicable and hugely detrimental to the Nigerian Diaspora who he said rely on hundreds of money transfer companies and banks, providing them with choice, convenience and competitive pricing.
But sources say that the unregistered IMTOs like the WorldRemit had formed a racket, which suffocates the $21 billion annual Diaspora remittances from flowing into the economy. It was also to forestall this ugly trend that the CBN directed banks to sell dollar remittances to the BDCs going forward so that these unregistered IMTOs would no longer have access to such inflows.
Besides, the CBN is now insisting that all financial service providers in Nigeria, just as in other jurisdictions, must be duly licensed in order to protect both customers and the financial system as well as to ensure the credibility of financial transactions.
Isaac Okorafor, acting director, corporate communications, CBN, told BusinessDay that the apex bank had not closed the operations of any licensed MTO. “What we are trying to do is to ensure that money transfer is legal, transparent and to the benefit of the Nigerian economy.
“For the avoidance of doubt, all licensed IMTOs, in line with the CBN circular on the sale of foreign currency proceeds of July 22, 2016, are required to remit foreign currency to their respective agent banks in Nigeria for disbursement in naira to the beneficiaries, while the foreign currency proceeds are to be sold to Bureaux De Change operators, for onward retail to end users,” Okorafor further explained in the statement.
“The CBN will therefore not condone any attempt aimed at undermining the country’s foreign exchange regime,” he said.
Accordingly, members of the public are advised to beware of the activities of such unregistered IMTOs for the greater economic good of Nigeria, the apex bank further warned.
