Why Nigeria suspended international money transfer operators

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Why Nigeria suspended international money transfer operators
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Following several reports in the media regarding the suspension of international money transfers, the Central bank of Nigeria has advised Nigerians at home and in the Diaspora to beware of the unwholesome activities of some unlicensed International Money Transfer Operators in the country.

The CBN said in a statement by its Acting Director, Corporate Communications,

Why Nigeria suspended international money transfer operators
Why Nigeria suspended international         money transfer operators

Isaac Okoroafor, that the warning had become necessary because of the activities of some unregistered IMTOs, whose modes of operation were detrimental to the Nigerian economy.

Okoroafor stated, “All financial service providers in Nigeria, just as in other jurisdictions, are required to be duly licensed in order to protect both customers and the financial system as well as to ensure the credibility of financial transactions.

“For the avoidance of doubt, all licensed International Money Transfer Operators, in line with the CBN circular on the sale of foreign currency proceeds of July 22, 2016, are required to remit foreign currencies to their respective agent banks in Nigeria for disbursement in naira to the beneficiaries, while the foreign currency proceeds are to be sold to Bureaux De Change operators for onward retail to end users.

“The Central Bank of Nigeria will, therefore, not condone any attempt aimed at undermining the country’s foreign exchange regime.

“Accordingly, members of the public are advised to beware of the activities of such unregistered IMTOs for the greater economic good of Nigeria.”

One of the banned operators WorldRemit founder and CEO, Ismail Ahmed said: “This move is arbitrary, inexplicable and hugely detrimental to the Nigerian diaspora who rely on hundreds of money transfer companies and banks, providing them with choice, convenience and competitive pricing.

“Even now, as we suspend our service, there is no clarity on why this sudden change has happened. If it is on the basis of new rules, there was no warning. If it is a re-interpretation of old rules, local correspondent networks and banks should have been forewarned.

“This reverses the progress made by the country when the Nigeria Central Bank banned Western Union’s exclusivity agreements (http://APO.af/aicftV) that had created a near-monopolistic position in the international money transfer market. Western Union controlled 78% of the market share when CBN outlawed exclusivity agreements with local banks.”