The Central Bank of Nigeria (CBN) has provided clarifications on the interpretations on the operationalization of Domiciliary Accounts. The clarifications were partly to ensure the stability of the foreign exchange market.’
The clarifications are;
Exports Proceeds Domiciliary Accounts: These accounts will continue to be operated based on existing regulations which allow account holders use of their funds for business operations only, with any extra funds sold in the Investors’ & Exporters’ (I&E) Window.
Ordinary Domiciliary Accounts:
- Where accounts are funded by electronic/wire transfer, account holders will be allowed unfettered and unrestricted use of these funds for eligible transactions.
- Where accounts are funded by cash lodgments, existing regulation will continue to apply.
The Apex bank implied that these clarifications are necessary given its vastly improved capabilities to monitor transactions, forestall money laundering and prevent the adverse effect of Dollarization in the Nigerian economy.
Investogist reported in September on rumours about a memo purportedly sent to the foreign exchange trading desks of leading banks, widely shared on some social media platforms and which was subject of a debate on Twitter, indicates that there are moves to review the utilization of inflows into customers domiciliary accounts.
According to a report by Nairametrics, the said memo made several recommendations on utilization actions for different types of inflows of forex into the country.
These clarifications along with earlier publication by the CBN on recipients of International Money Transfer may be geared towards reassuring the markets and investors.
By; Nnamdi M.