CBN Clarifies Bank Directive For Domiciliary Accounts, Forex Accessibility

The Central Bank of Nigeria (CBN) has explained its directive on Domiciliary Accounts to Nigerian banks following different interpretations. The CBN made the clarification on Export Proceeds Domiciliary Accounts and Ordinary Domiciliary Accounts.

According to a recent statement released by the CBN and seen by AllNews, it was stated that holders of Export Proceeds Domiciliary Accounts will continue to use the account for business only, while Ordinary Domiciliary Accounts have two different directives.

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It was learnt that for users of Ordinary Domiciliary Accounts, who receive funds through wire transfers, they will be able to utilise their funds for eligible transactions, but accounts that received cash deposit, existing regulation will continue to apply.

The CBN said the directive is to ensure stability of the foreign exchange market. AllNews had reported that CBN governor, Godwin Emefiele, has been tightening the CBN's grip on the the forex market, to reduce pressure on Nigeria's Naira.

"Export Proceeds Domiciliary Accounts: These accounts will continue to be operated based on existing regulations which allow account holders use of their funds for business operations only, with any extra funds sold in the Investors' & Exporters' (I&E) Window.

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"Ordinary Domiciliary Accounts: Where accounts are funded by electronic/wire transfer, account holders will be allowed unfettered and unrestricted use of these funds for eligible transactions. Where accounts are funded by cash lodgments, existing regulation will continue to apply." the statement reads.

The CBN further stated that, "These clarifications are necessary given the vastly improved capabilities of the Central Bank of Nigeria to monitor transactions, forestall money laundering and prevent the adverse effect of Dollarization in our economy."

Adding that, "All Authorized Dealers and the General Public are to note that BVN would be used to enforce compliance with these regulations."