CBN sets $1m as capital requirement, N10m application fee for International Money Transfer Operators

The Central Bank of Nigeria (CBN) has established a minimum operating capital requirement for International Money Transfer Operators (IMTOs) at $1 million for foreign entities and an equivalent amount for local IMTOs.

The apex bank outlined the development in its revised guidelines for the operation of IMTOs, which were officially released on January 31, 2024.

According to the guidelines, applicants must adhere to the CBN’s anti-money laundering, combating the financing of terrorism, and countering proliferation financing of weapons of mass destruction regulations.

These regulations are detailed in the CBN guidelines for licensing banks and other financial institutions in Nigeria.

IMTOs intending to operate in Nigeria are required to submit their applications to the director of the trade and exchange department, along with various documentation.

This includes a non-refundable application fee of N10 million only, or an amount specified by the Bank. Other necessary documents encompass approval to operate in other jurisdictions or agency agreements, evidence of tax clearance, and incorporation documents for indigenous IMTOs.

Furthermore, the ownership structure of the IMTO, board approval to operate international money transfer services, and profiles of the company’s board and management are essential requirements.

The documentation process also mandates information on beneficial owners (BO) of the company, credit reports from licensed credit bureaus for shareholders and key officers.

These stringent measures aim to enhance transparency, accountability, and regulatory compliance within the international money transfer sector. IMTOs are also expected to provide any other information, documents, and reports specified by the CBN from time to time.

According to the new guidelines, IMTOs are required to undergo the renewal process, subject to a fee of N10 million only or an amount specified by the CBN, payable through electronic transfer or bank draft on or before the 31st of January each year.

This fee structure aims to contribute to the cost of maintaining regulatory compliance and ensuring the continued integrity of money transfer services.

Crucially, the renewal of IMTO approval must be completed within the first quarter of every year, emphasizing the CBN’s dedication to a timely and efficient renewal process. Failure to comply with this timeframe could have significant consequences for IMTOs.

In a move to enforce strict compliance, the guidelines state that IMTOs must provide their agent banks with a copy of the CBN renewal for the current year within the first quarter. Should an IMTO fail to furnish its agent bank with this documentation, the bank is directed to cease any further transactions with the non-compliant IMTO.