CBN Removes Limits on Domiciliary Accounts, Allows Unrestricted Access to Funds
The Central Bank of Nigeria (CBN) has announced the removal of limits placed on domiciliary accounts in a bid to promote transparency and liquidity in the foreign exchange (FX) market. In a statement titled ‘CBN issues further guidance on operational changes to foreign exchange market,’ the CBN outlined the new regulations, granting account holders unrestricted access to funds and the ability to make daily withdrawals of up to $10,000.
Under the new rules, ordinary domiciliary account holders can freely deposit and access funds in their accounts. Cash deposits into domiciliary accounts will not be restricted, provided that banks conduct proper Know Your Customer (KYC) checks and adhere to anti-money laundering and counter-terrorism financing laws.
The move comes after banks had imposed limits on transfers from cash lodgements into domiciliary accounts earlier this year. The CBN’s decision to lift these limits followed discussions at a Bankers’ Committee meeting, aiming to improve transparency, liquidity, and price discovery in the FX market while discouraging speculation.
The statement also clarified that all visible and invisible transactions, such as medicals, school fees, travel allowances, remittances, and others, were eligible for the Investors’ and Exporters’ window. Banks were urged to process eligible invisible transactions promptly using the applicable rate at the I&E window.
Additionally, the CBN emphasized its commitment to orderly settlement of committed FX forward transactions and maintaining market confidence. It also mentioned plans to normalize its Cash Reserve Ratio maintenance processes and ensure equitable implementation across the banking industry. The CBN intends to engage stakeholders as it continues to implement ongoing reforms.
The removal of limits on domiciliary accounts is expected to provide more flexibility for account holders, enhance customer confidence, and contribute to overall stability in the FX market.
