Connect with us
deals book


Nigerian Banks to stop “instant completion” for forex transfers online

You can no longer transfer forex online without documentation and subsequent approval of the bank.



Commercial Banks in Nigeria are informing customers that they can no longer make instant online transfers out of their domiciliary accounts without proper documentation.

Before now, all a customer had to do was log into their banking application on their mobile phone or via a browser to make transfers without the need to provide any documentation. However, emails sent to customers by banks as seen by Nairametrics contain new documentation requirements that must be provided before the transfers are allowed to proceed.

Here is an excerpt of an email seen by Nairametrics

READ: How scammers use SIM cards to rob your bank accounts

“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……….”

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.”


READ: How fintech companies are wrestling with commercial banks in Nigeria

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.”

READ: Diaspora remittances are down 61% YoY highlighting need for CBN’s Naira4Dollar promo

What this means

Nairametrics inquired from one of the banks to get an understanding of what this means and how it affects customers seeking to make transfers.

  • Where does this rule apply? This rule applies only to online transfers outside of a bank using your mobile app or internet banking.
  • To make the transfer, you will attach documents via email and then wait for them to be approved by the backroom staff of the banks before the transfer is finalized. Without the approval of those in the backroom, the transfer will not be completed.
  • Transfer from your account to your personal account – We understand this will not be affected by this rule as no supporting document is required to make transfers from your personal account to another personal account or from one company account to the same account overseas.
  • Transfer from your account to a third party – You will be required to provide any of the respective documentation required above for any transfer between your account and a third-party account abroad.
  • This rule will affect how people transfer forex from one account to another and will impact everything from you transferring money to your spouse, sibling, or family member, payment of invoices, and other forms of online transfer that did not need documentation.

READ: Zenith Bank GMD explains why its difficult for SMEs to get loans from  banks

Why this matters

Nairametrics analysts understand this is yet another attempt by the central bank to track the flow of forex within the banking system, reducing incidences of undocumented transfers or currency exchanged occurring outside of the banking sector.

Jaiz bank
  • Critics believe this is another desperate attempt by the apex bank to restrict foreign currency flows via banks and outside of the official systems.
  • 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 which they do not believe reflects the true value of the exchange rate.
  • This rule will gross affect Nigerians seeking to make peer to peer cryptocurrency transfers as they will not need to provide documentation for their transfers to be processed.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]



    Leave a Reply

    Your email address will not be published.

    This site uses Akismet to reduce spam. Learn how your comment data is processed.


    Naira falls against US dollar as CBN extends Naira4dollar scheme indefinitely

    The exchange rate between the naira and the US dollar, closed at N411/$1 at the I&E Window.



    Thursday, 6th May 2021: The exchange rate between the naira and the US dollar, closed at N411/$1 at the Importers and Exporters window, where forex is traded officially.

    Naira fell against the US dollar to close at N411 to a dollar on Thursday, 6th May 2021, representing a 50 kobo decline when compared to N410.5/$1 that was recorded on Wednesday, 5th May 2021.

    Meanwhile, the naira maintained stability at the parallel market as it closed at N485/$1, while Nigeria’s external reserve plunged $28.94 million to close at $34.76 billion on Wednesday, 5th May 2021.

    Also, the apex bank issued an indefinite extension to its Naira4dollar scheme for foreign remittances, which was introduced some months ago. This is aimed at sustaining the country’s foreign exchange market liquidity.

    READ: Naira gains at NAFEX window as dollar supply improves by 305%

    Trading at the official NAFEX window

    The naira depreciated against the US dollar at the Investors and Exporters window on Thursday to close at N411/$1, representing a 50 kobo decline when compared to the N410.5/$1 that was recorded on Wednesday.

    • The opening indicative rate closed at N410.37 to a dollar on Thursday, 6th May 2021, representing a 12 kobo depreciation when compared to the N410.25/$1 recorded on Wednesday.
    • Also, an exchange rate of N420.9 to a dollar was the highest rate recorded during intra-day trading before it settled at N411/$1. It, however, sold for as low as N400/$1 during intra-day trading.
    • Forex turnover at the Investor and Exporters (I&E) window declined by 38.4% on Thursday, 6th May 2021.
    • A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover decreased from $172.52 million recorded on Wednesday, 5th May 2021 to $106.34 million on Thursday, 6th May 2021.

    READ: Exchange rate depreciates at NAFEX window as Bitcoin slumps by over 5%

    Cryptocurrency watch

    Bitcoin, the world’s most popular cryptocurrency, slumped by 2% on Thursday to trade at $56,358.03.

    • As of 11:31 pm on Thursday, the highly valued cryptocurrency asset witnessed a decline despite soaring as high as 5.5% on Wednesday.
    • However, Ethereum recorded a marginal growth of 0.07% to close at $3,530.75, capitalising on the 9.1% gain recorded in the previous day.
    • The total crypto market capitalisation depreciated by 0.53% to close at $2.33 trillion on Thursday.
    • Meanwhile, payments giant, Visa and financial services provider TALA have partnered to boost cryptocurrency adoption in emerging markets.
    • This partnership is aimed at easing the process of converting, storing and using cryptocurrencies by the underbanked consumers.

    READ: Naira depreciates as dollar sales top $100m a day at I&E window

    Crude oil price stalls

    Crude oil prices witnessed a bearish trading session on Thursday, 6th May 2021 as the oil price rally stalled due to the worsening covid-19 crisis in India.

    • Brent Crude dipped by 0.97% on Thursday to close at $68.29 compared to its closing price of $68.96 recorded at Wednesday’s trading session.
    • The decline in oil prices, which cut short the rally to $70 a barrel was due to a fresh record of new daily coronavirus cases reported by the third-largest importer of oil in the world.
    • Also, according to energy analytics firm OilX, China’s crude oil imports fell by 11% in April 2021 to stand at 10.41 million barrels per day.

    External reserve

    Nigeria’s external reserve plunged for the 12th consecutive day on Wednesday, 5th May 2021 as it dipped $28.91 million to close at $34.76 billion.

    • The nation’s foreign reserve declined from $34.79 billion recorded as of Tuesday, 4th May 2021 to $34.76 billion on Wednesday, representing a 0.28% decline.
    • Nigeria’s foreign reserve has dipped $497.36 million since 16th April 2021 to date.
    • Nigeria will hope to boosts its foreign reserve position as oil prices continue to rally high and the CBN intensified effort to encourage dollar remittances into the country.

    Continue Reading


    How rise in oil prices will impact exchange rate

    Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.



    Crude oil prices rebound ease investors’ concerns for Nigeria debt market, How substantial is compliance for the Oil market?, Crude Oil price soars high on new COVID-19 vaccine

    Nigeria, Africa’s top oil producer and home to the second-largest reserves on the continent, is expected to benefit from the rise in oil prices in many ways.

    Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.

    Historically, there has been a strong positive correlation between crude oil prices and the performance of the Nigerian economy. For example, when oil prices plummeted due to the COVID-19 outbreak and the implementation of lockdown protocols in 2020, the Nigerian government scaled down the budget to align better with the drop in crude oil price.

    Now that there is a surge in oil price, we should expect that there would be an increase in government revenue translating to a stirring-up of aggregate demand.

    READ: Nigeria records highest trade deficit since 1981

    Why oil price is rising

    The OPEC+ output restrains, despite the strong recovery of oil consumption, continues to give formidable fitting to bullish sentiments about soaring oil prices.

    • Oil prices are rising as optimism about a strong rebound in fuel demand in developed countries overshadows concerns of full lockdown to curb covid-19 in India.
    • Oil (BRENT) has seen a 34.3% increase Year to Date with the oil price at $69.34 showing an increase of +1.15% as of the time of writing this article.

    What it means for the exchange rate

    Perhaps the greatest benefit of the recent oil price rise is exchange rate stability. Since the crash in oil prices began in late 2019, Nigeria’s official currency has faced a barrage of sell pressure as local and foreign investors increase demand for the dollar.

    This forced the central bank to curtain demand, implementing various forms of capital controls across the economy. With oil prices on the rise, Nigerians can begin to expect the following:

    • An increase in government revenue, which also means higher dollar earnings and thus increased FX reserves. Nigeria’s FX reserve reportedly stands at $34.7 billion as of Tuesday, May 4th, 2021. Soaring oil prices strengthen the exchange rate and promote economic growth. This effect trickles down to higher reserves held by the CBN meant for stabilization of the currency.
    • Higher oil prices could also mean a more stable economy thus propelling economic growth. This, in turn, attracts foreign investor dollars or at least retains what we already have and reduces the pressure on demand.
    • Nigerians have intensified diversifying their currency holdings, keeping less of naira and holding more dollars as they hedge against depreciation. This has kept the pressure on the exchange rate over the last one and a half years. This trend could reverse if oil prices continue their steady rise.

    READ: Dangote: Cement price from our factories is between N2,450 and N2,510 per bag, VAT inclusive

    The implication? The parallel market exchange rate might appreciate closer to the NAFEX rate if this trend continues.

    Hence, it is safe to presume that as the world resume business and travel activities, the demand for Black Gold will continue to increase, and with supply held steady by OPEC+ we can speculate that this is enough catalyst to relieve the pressure of FX demand and increase our foreign reserves thereby propelling growth.

    However, the inclusivity of this growth may still be in question.

    Continue Reading


    Nairametrics | Company Earnings

    Access our Live Feed portal for the latest company earnings as they drop.