The Central Bank of Nigeria (CBN) has announced the prohibition of banks and financial technology companies (fintechs) from offering international money transfer services. This development, outlined in the revised guidelines for the operations of International Money Transfer Operators (IMTOs), was officially released on January 31, 2024.
The revised guidelines mark a notable expansion of previous regulations. While the 2014 guidelines only restricted deposit money banks from offering such services, the updated rules now extend the ban to fintech companies as well.
According to the document, banks are now barred from directly operating International Money Transfer services but may serve as agents. Similarly, Financial Technology Companies are prohibited from obtaining approval for IMTO services.
Moreover, the guidelines 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 reflects the CBN's commitment to tightening regulatory oversight and ensuring compliance with banking regulations. By extending the ban to fintech companies, the CBN aims to maintain stability and integrity in the country's financial system.
The move is seen as a proactive measure to address potential risks and uphold the integrity of Nigeria's financial sector. However, it also raises concerns about the impact on businesses, individuals, and the broader economy, as international money transfer services play a vital role in facilitating cross-border transactions and supporting economic activities.
As stakeholders assess the implications of this decision, the CBN's regulatory actions continue to shape the landscape of Nigeria's financial sector, emphasizing the importance of adherence to regulatory standards and the need for robust oversight to safeguard the interests of all stakeholders.
