The Central Bank of Nigeria appears to have warned depositors from using their accounts for what they term “perceived as International Money Remittance Service (IMTO) or Bureau de Change (BDC) activities” without the approval of the CBN. This instruction was sent through commercial banks to depositors and looks to be targeting people who use their domiciliary accounts for black market trade of forex.
According to banking sources, some people with domiciliary accounts typically use their accounts as a conduit for buying and selling forex making a nice profit either way. Rather than route money through the interbank market, most companies and individuals prefer to run transactions via their domiciliary accounts selling forex to buyers with a broker as the facilitator.
The directive is quite unclear as no one knows exactly how the CBN can determine what other transactions differ from personal or company related? The directive did not define what is a “personal or company related transaction” and neither did it explain how it can “perceive” what is an IMTO or BDC transaction. In fact, some wonder how a CBN that is yet to eliminate the black market operators from the streets of major cities in Lagos can block black market activities via online transfers without disrupting other legitimate transactions.
The Central Bank of Nigeria has come under fire in the last one year for issuing several policy actions that have backfired only for them to reverse it when the situation is worse and nearly irreversible.
Thanks to Victor “Legend” for the tip.