Citing the need to deepen the foreign exchange (FX) market, boost liquidity and attain convergence in exchange rates between the parallel and official markets, the Central Bank of Nigeria (CBN) has approved that banks may deposit their excess foreign currency notes with its Lagos and Abuja branches.
The central bank stated that the approval of FX deposit at its branches was sequel to the increasing demand by banks to deposit their FX cash with the CBN for onward credit to their off-shore accounts with the correspondent banks.
The new directive which becomes effective immediately is contained in a circular issued yesterday, and signed by acting CBN Director, Currency Operations Department, Solaja Olayemi, addressed to all banks, a copy of which was posted on its website.
The framework mandates banks to give at least three working days’ notice of their intent to deposit forex cash, in writing to the Branch Controller, CBN Lagos or/and Abuja, adding that this must be accompanied by the list of owners of foreign currency to be deposited.The CBN also requested that all deposits must be within a maximum limit of $10 million consisting higher bills of $100 and $50 per day while the lower bills including $20 and below must not exceed $1 million.
In addition, British Pound Sterling (GBP) and Euro cash have maximum limits of £1 million and €1 million respectively.The CBN further stated that two representatives of the depositing bank must be present to witness and confirm the amount to be deposited.The circular stressed that the deposits may be in $100, $50, $20, $10, $5, $1 and all GBP and EURO denominations – adding that each denomination shall be in separate boxes.
The revised guidelines also mandates deposit money banks (DMBs) to engage the services of only CBN-registered CIT companies for deposits of foreign currency notes, noting that the time for accepting deposits shall be between 8 a.m and 12 p.m. The apex bank further clarified that Abuja and Lagos branches would receive, count and authenticate such deposits in the presence of the representatives of the depositing bank on the same day.
The bank shall credit the DMBs account through their offshore correspondent bank within the cycle time of T+5. Also, the handling charge of 0.30 per cent of the authenticated amount shall be recovered from the DMBs current account with CBN. The CBN however, warned that it would not accept forex deposits from any DMB that fails to comply with any of the guidelines.
