The Central Bank of Nigeria (CBN), Sunday, lifted the limits placed on domiciliary accounts. The CBN, via a statement, disclosed that the new regulation allowed account holders to deposit freely, have unrestricted access to funds in accounts, and make up to $10,000 withdrawals daily.
The Central Bank of Nigeria (CBN) has announced that it has lifted the previous limits placed on domiciliary accounts, a move that will allow account holders to deposit freely into their accounts, with unrestricted access to their funds, and be able to make up to $10,000 withdrawals daily. This marks a significant shift in policy by the CBN, as it shows the bank is taking steps to further liberalize the Nigerian foreign exchange market.
“Ordinary domiciliary account holders shall have unfettered and unrestricted access to funds in their accounts. Domiciliary account holders are permitted to utilise cash deposits not exceeding $ 10,000 per day or its equivalent via telegraphic transfer.”
The statement by the CBN, which is titled “CBN issues further guidance on operational changes to foreign exchange market,” confirmed that ordinary domiciliary account holders will now have unrestricted access to funds in their accounts. Domiciliary account holders are permitted to utilize cash deposits that do not exceed $10,000 per day or its equivalent through a telegraphic transfer.
“DMBs shall provide returns to the CBN, including the ‘purpose’ for such transactions. Cash deposits into domiciliary accounts will not be restricted, subject to DMBs conducting proper KYC, due diligence and adhering to the spirit and letter of extant AML/CFT laws and other relevant rules and regulations.”
The CBN also revealed that Deposit Money Banks (DMBs) are required to provide returns to the bank on such transactions, including the “purpose” for such transactions. However, cash deposits into domiciliary accounts will not be restricted, subject to DMBs conducting proper Know Your Customer (KYC) and due diligence processes, while adhering to the spirit and letter of the extant Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) laws and other relevant rules and regulations.
- In May 2021, banks started placing new limits on transfers that domiciliary accounts holders could make from cash lodgements.
- “The maximum limit for foreign currency transfers by cash deposits is now $5,000 per month. This means that only a maximum of $5,000 monthly will be allowed for transfers if the source of funds is a cash deposit into a domiciliary account. Cash deposits of foreign currencies other than USD may be paid into domiciliary accounts (subject to an equivalent of $5,000 monthly limit) but will not be allowed for transfer purposes,” the 2021 circular stated.
It is worth noting that in May 2021, banks started placing new limits on transfers that domiciliary account holders could make from cash lodgements. The circular read, “the maximum limit for foreign currency transfers by cash deposits is now $5,000 per month. This means that only a maximum of $5,000 monthly will be allowed for transfers if the source of funds is a cash deposit into a domiciliary account. Cash deposits of foreign currencies other than USD may be paid into domiciliary accounts (subject to an equivalent of $5,000 monthly limit) but will not be allowed for transfer purposes.”
This move by the CBN to lift the previous limits placed on domiciliary accounts is viewed by many as a positive step towards encouraging more foreign investments into Nigeria, and could also help to increase the inflow of foreign exchange into the economy.
