Fintechs are prohibited from providing the aforementioned service by CBN, which also raises the IMTO license application fee from 500k to 10 million Naira. A new minimum operational capital requirement of $1 million for overseas enterprises is also announced by the agency for international Money Transfer Operators (IMTOs).
CBN Increases IMTO License Application Fee
The commercial bank regulator has announced plans to remove the initial cap on exchange rates provided by International Money Transfer Operators (IMTOs) and allow supply and demand to decide rates going forward, marking a significant shift in policy. This shift is a component of a larger plan to improve the effectiveness of remittance inflows into the nation and liberalize the foreign exchange market.
The Revised Operational Guidelines for IMTOs in Nigeria
The updated operating standards for IMTOs in Nigeria were released by the central bank in a document that was recently circulated on Thursday, January 31, 2024, and signed by Hassan Mahmud, Director of the Trade and Exchange Department. The new regulations mandate that organizations seeking to offer international money transfer services submit an application directly to Mahmud in Abuja. They would then have to go through a two-step approval procedure that consists of an initial approval-in-principle (AIP) and a final approval.
A non-refundable application cost of ₦10 million must be paid, and applicants must meet strict standards, such as having a minimum share capital of $1 million. Among other requirements, they also need to submit incorporation documents and evidence of tax compliance. Getting an AIP does not let you to start operating; it is only a step toward getting the final permission, which is dependent on completing further documentation as required by the standards.
IMTOs Are Obligated To Pay an Annual Renewal Fee Of ₦10 Million By January 31 Each Year
IMTOs must pay an annual renewal fee of ₦10 million by January 31 of each year in order to keep their operating status after gaining final approval. The approval could be withdrawn if you don’t comply.
The Central Bank of Nigeria’s Stance on the New Development
Furthermore, in order to ensure that their operations support Nigeria’s financial security and integrity, the Central Bank of Nigeria (CBN) mandates that all sanctioned IMTOs strictly abide by the laws against anti-money laundering (AML), combating the financing of terrorism (CFT), and countering the proliferation financing of weapons of mass destruction.
