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Tuesday, April 23, 2024

Why CBN Banned Cash Deposits Into Domiciliary Accounts

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Nigeria’s apex bank, on Wednesday, Aughust 5, 2015 officially banned cash deposits into domiciliary accounts across the country.

This was contained in a circular issued and signed by the Director of Trade and Exchange, Central Bank of Nigeria,(CBN), Olakanmi Gbadamosi.

The central bank said its action was stirred by recent statements by individual Deposit Money  Banks suspending the payment of foreign currencies into domiciliary accounts.

The circular read, “The Central Bank of Nigeria has considered the recent statements by Deposit Money Banks concerning the large volume of foreign currencies in their vaults and the decision to stop accepting foreign currency cash deposits into customers’ domiciliary accounts as a welcome development.

“Therefore, in its continued efforts to stop illicit financial flows in the Nigerian banking system which aligns with the anti-money Laundering stance of the Federal Government, the CBN hereby prohibits from the date of this circular the acceptance of foreign currency cash deposits by DMBs.

“For foreign currency cash lodgements made prior to the date of this circular, the account holder has the option to either withdraw his or her foreign currency cash or the Naira equivalent. For the avoidance of doubt, only wire transfers to and from Domiciliary Accounts are henceforth permissible.

“The CBN advises individuals that wish to source foreign currency for eligible and legitimate purposes such as BTA, PTA medical, mortgage, school fees, goods etc. to do so through recognised channels with the use of Form ‘A’ for “invisible” and Form ‘M’ for ‘visible’ transactions. By this circular, those who deposited foreign currencies into their accounts before the directive will now have to withdraw the cash as they are not going to be allowed to transfer the funds.”

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