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CBN Bans Payment of Cash into Domiciliary Accounts

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New government policy: the Central Bank of Nigeria (CBN) has banned the payment of cash into domiciliary accounts in the country. In a circular released on Wednesday and signed by Olakanmi Gbadamosi, the director of trade and exchange, the central bank said its action followed recent statements by individual banks suspending the payment of foreign currencies into domiciliary accounts.

Gbadamosi wrote: “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.”

By this circular, those who deposited foreign currencies into their accounts before the directive will now have to withdraw the cash as they are not going to be allowed to transfer the funds.