The Central Bank of Nigeria (CBN) has recently granted approval to commercial, merchant, and non-interest banks operating within the country to engage in trading activities involving foreign currencies deposited in dormant accounts established under the foreign currency disclosure, deposit, repatriation, and investment scheme.
This initiative, outlined in the newly approved guidelines for the implementation of the foreign currency scheme, which is set to commence on November 6, 2024, allows banks to trade with foreign currency deposits that have not been immediately invested by participants.
The CBN has emphasized that these foreign currency deposits must remain accessible to participants upon request. Furthermore, the apex bank has mandated that approved banks submit monthly reports on the scheme’s operations by the 14th day of the following month.
The guidelines also stipulate that interest payments on uninvested funds held in designated domiciliary accounts should align with the relevant provisions of the Guide to Charges by Banks and Other Financial Institutions in Nigeria.
To ensure transparency and effective oversight, the CBN has imposed reporting requirements on all participating banks. These reports must include details such as the total number of enrolled participants, the total value of Investment Funds Transfer Certificates (ITFCs) received, an update on application processing, financial transactions conducted under the scheme, and the value of uninvested ITFCs.
The CBN has the authority to request additional information to support its monitoring and evaluation efforts.
This development comes shortly after the Federal Government launched a 9-month Voluntary Currency Disclosure, Depositing, Repatriation, and Investment Scheme, known as the “Disclosure Scheme,” under Executive Order No. 15 of 2023.
This scheme incentivizes Nigerians to disclose and deposit foreign currency holdings in banks, offering benefits such as tax immunity, asset protection, confidentiality, interest on deposits, and flexible repatriation options.