CBN Bars BDC Operators From Cash, Wire Transfers For Import Transactions

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Further to its recent policy barring importers of certain goods and services from accessing foreign exchange in the Nigerian market, the Central Bank of Nigeria (CBN) on Thursday placed a $5,000 ceiling for cash or wired transfers by Bureau De Change (BDC) operators interested in funding certain imports.

The Director of Trade and Exchange department of the CBN, Olakanmi Gbadamosi, had in a circular to all deposit money banks (DMBs) listed about 41 import items classified as “Not Valid for Foreign Exchange” in any of the segments of the Nigerian foreign exchange market.

Some of the affected items include rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and processed meat products, vegetables and process vegetable products, poultry (chicken, eggs, turkey), tomatoes/tomato paste, soap and cosmetics and clothes.

Other items include private airplanes/jets, Indian incense, tinned fish in sauce (Geisha/sardines, cold rolled steel sheets, galvanized steel sheets, roofing sheets, wheelbarrows, head pans, metal boxes/containers, enamelware, steel drums and pipes, wire mesh, steel nails, wood particle boards and panels.

The policy also covers security and razor wire, wood particle boards and panels, wood fibre Board and panels, Wood fibre Boards and panels, wooden doors, furnitures, toothpicks, glass/glassware, kitchen utensils, tableware, tiles (vitrified, ceramics), textiles, wooden fabrics, plastic/rubber products (polypropylene granules, cellophane wrappers, euro bond/foreign currency bond/share purchases.

However, in another circular on Thursday to all authorized FOREX dealers, BDCs and the general public, Mr. Gbadamosi warned against funding the importation of all the above classified items at the interbank market from the proceeds of exports and BDC sources.

“BDCs shall use the cash purchased for the transactions listed, provided the invoices/demand notes for the payment do not exceed $5,000 or its equivalent in other foreign currencies per transaction,” the Bank said.

Clarifying on the policy aimed at stabilizing the foreign exchange market and stimulating local production of goods and services, the CBN directed the BDCs not to fund import transactions in any form whatsoever, either by cash or wire transfer.

“Accordingly, authorized dealers are hereby barred from effecting wire transfers from the account of their BDCs’ customers henceforth,” the CBN said.

“The BDCs are only authorized to deal in foreign currency cash, and to sell not more than $5,000 to an individual customer, and strictly for Business Travel/Personal Travel Allowance, Monthly mortgage payment, School fees abroad, Credit card payment, Utility bills and Life insurance premium payments.”

The bank expressed dismay over alleged movements of huge foreign currency cash across Nigerian borders by individuals and corporate bodies without due declaration in compliance with Nigerian  laws .

While warning against such illegal practices, the Bank it was already collaborating with other relevant agencies of government to ensure full compliance with the provisions of the law.

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