CBN Tightens Control on Diaspora Dollars: IMTOs Must Now Settle Remittances Through Naira Accounts by May 1
What the Policy Is About
The Central Bank of Nigeria (CBN) has issued a new directive to regulate how diaspora remittances enter the country.
All International Money Transfer Operators (IMTOs) must now process transactions through designated naira settlement accounts held in Nigerian banks.
Implementation Timeline
Deadline for compliance: May 1, 2026
Operators have a transition window to adjust systems and processes.
Who Must Comply
The directive applies to:
International Money Transfer Operators (e.g., remittance companies)
Authorised dealer banks
Foreign exchange market participants
Mandatory Use of Naira Settlement Accounts
IMTOs must:
Route all remittance inflows through Nigerian bank accounts
Use naira-denominated settlement accounts
Process beneficiary payments through these accounts
Credit proceeds from FX conversions into them
Funds can no longer move through informal or opaque channels.
Flexibility for Operators
IMTOs may:
Use existing accounts
Open new accounts
Maintain multiple accounts across different banks
This allows operational flexibility while maintaining regulatory oversight.
Why CBN Introduced the Rule
The main objectives are to:
Improve transparency and traceability
Increase liquidity in the official FX market
Reduce leakages into the parallel (black) market
Strengthen monitoring of diaspora inflows
Remittances are one of Nigeria’s largest sources of foreign exchange.
Real-Time FX Pricing Requirement
IMTOs must now reference real-time exchange rates from Bloomberg BMatch when pricing transactions.
Expected benefits:
Better price discovery
Reduced pricing distortions
Fairer rates across the market
Greater confidence in official FX channels
Expanded Role for Banks
Authorised dealer banks can now:
Transfer foreign currency from IMTO settlement accounts
Supply other banks
Supply licensed Bureau de Change operators
This improves distribution of FX liquidity across the system.
Target: Parallel Market Leakages
By forcing remittance funds into the formal banking system, CBN aims to:
Boost official FX supply
Reduce pressure on the naira
Capture previously untracked flows
Improve market efficiency
️ Stronger Compliance Requirements
IMTOs must also:
Maintain detailed transaction records
Comply with anti-money laundering rules
Prevent terrorism financing
Submit to regulatory reviews
Why Diaspora Remittances Matter
Remittances from Nigerians abroad:
Provide billions of dollars annually
Support households and businesses
Help stabilise the currency
Supplement oil revenue
Bigger Policy Context
This move signals CBN’s broader strategy to:
Stabilise the foreign exchange market
Restore investor confidence
Improve market discipline
Increase official dollar supply
Key Takeaway
Nigeria is tightening control over diaspora dollars to ensure they pass through official channels, strengthen FX liquidity, and reduce reliance on the parallel market.
What the Policy Is About
The Central Bank of Nigeria (CBN) has issued a new directive to regulate how diaspora remittances enter the country.
All International Money Transfer Operators (IMTOs) must now process transactions through designated naira settlement accounts held in Nigerian banks.
Implementation TimelineDeadline for compliance: May 1, 2026
Operators have a transition window to adjust systems and processes.
Who Must Comply
The directive applies to:
International Money Transfer Operators (e.g., remittance companies)
Authorised dealer banks
Foreign exchange market participants
Mandatory Use of Naira Settlement Accounts
IMTOs must:
Route all remittance inflows through Nigerian bank accounts Use naira-denominated settlement accounts Process beneficiary payments through these accounts Credit proceeds from FX conversions into themFunds can no longer move through informal or opaque channels.
Flexibility for Operators
IMTOs may:
Use existing accounts Open new accounts Maintain multiple accounts across different banksThis allows operational flexibility while maintaining regulatory oversight.
Why CBN Introduced the Rule
The main objectives are to:
Improve transparency and traceability
Increase liquidity in the official FX market
Reduce leakages into the parallel (black) market
Strengthen monitoring of diaspora inflows
Remittances are one of Nigeria’s largest sources of foreign exchange.
Real-Time FX Pricing Requirement
IMTOs must now reference real-time exchange rates from Bloomberg BMatch when pricing transactions.
Expected benefits:
Better price discovery
Reduced pricing distortionsFairer rates across the market
Greater confidence in official FX channels
Expanded Role for Banks
Authorised dealer banks can now:
Transfer foreign currency from IMTO settlement accounts Supply other banks Supply licensed Bureau de Change operatorsThis improves distribution of FX liquidity across the system.
Target: Parallel Market Leakages
By forcing remittance funds into the formal banking system, CBN aims to:
Boost official FX supply
Reduce pressure on the naira
Capture previously untracked flows
Improve market efficiency️ Stronger Compliance Requirements
IMTOs must also:
Maintain detailed transaction records
Comply with anti-money laundering rules
Prevent terrorism financing
Submit to regulatory reviews
Why Diaspora Remittances Matter
Remittances from Nigerians abroad:
Provide billions of dollars annually
Support households and businesses
Help stabilise the currency
Supplement oil revenue
Bigger Policy Context
This move signals CBN’s broader strategy to:
Stabilise the foreign exchange market
Restore investor confidence
Improve market disciplineIncrease official dollar supply
Key Takeaway
Nigeria is tightening control over diaspora dollars to ensure they pass through official channels, strengthen FX liquidity, and reduce reliance on the parallel market.
