In a renewed effort at tracking the flow of foreign exchange within the banking system, reducing incidences of undocumented transfers or currency exchanges outside of the banking sector, the Central Bank of Nigeria (CBN) has directed deposit money banks to henceforth insist that online instant transfers out of their domiciliary accounts must be backed by proper documentation.
Hitherto, millions of dollars of transactions occur on a daily basis outside the banking system as Nigerians prefer to transact foreign exchange at black market rates rather than the official rates.
This is because they do not believe the official rates reflect the true value of the local currency, Naira, a development that has hampered adequate monetary policy measures as well as integrity of data from the regulatory bank.
Some analysts say this rule will have negative impact on Nigerians seeking to make peer to peer cryptocurrency transfers as they will now be expected to provide documentation for their transfers to be processed.
The usual ‘down time’ experienced during transactions as well as personal inadequacies of back-end staff may affect the needed instant responses to customers on the other end for seamless transactions, particularly, during emergencies
Consequently, banks in Nigeria are informing their customers that they can no longer make instant online transfers out of their domiciliary accounts without proper documentation as directed by CBN.
Specifically, before now, all a customer had to do was log into his or her banking application on the mobile phone or via a browser to make transfers without the need to provide any documentation.
Part of an email sent by one of the banks to its customers reads:
“This is to inform you that instant completion for international transfers on our digital platforms will cease from March 20, 2021. All international third-party transfers initiated on any of our digital channels will be completed at the back office after receipt of relevant supporting documents. Kindly ensure you send relevant supporting documents for your international transfers immediately transaction is initiated online to…….”
Consequently, the bank also advised its customers on the type of supporting documents required as follows;
“Samples of supporting documents to be provided for international transfers to third parties are;
Invoices
Bills
Demand Notes, etc
“For Medical, insurance, school fees, subscriptions and other similar invisible payments. For transparency and in line with CBN eligibility requirement, purpose of payment must be clearly indicated for all international transfers in the narration section provided.”
The advice from the bank also informed its customers that transfers that do not include the supporting documents listed above will be rejected after the assigned cut off time.
“Please note that for control purposes, all payments initiated without the relevant supporting documents being sent to the above noted email will be rejected after the existing currency cut-off time (EURO- 1.30PM, GBP & Others- 2.30PM and USD- 3.30 PM) same day.”
The new rule will impact on transfers to third party, including transferring money to one’s spouses, siblings, or family members as well as payment of invoices, and other forms of online transfers that previously did not need documentation.
