CBN’s Bold Move: ITMO Application Fee Skyrockets To N10 Million, Banks and Fintechs Face Service Prohibition

CBN’s Bold Move: ITMO Application Fee Skyrockets To N10 Million, Banks and Fintechs Face Service Prohibition

In a groundbreaking development, the Central Bank of Nigeria (CBN) has implemented a substantial increase in the application fee for international money transfer operator (IMTO) licenses, soaring from N500,000 to a staggering N10 million….CONTINUE READING

Marking a remarkable surge of about 1,900% over the span of a decade. This monumental shift is part of the updated guidelines for IMTO operations released on January 31, 2024.

The revised guidelines bring forth a pivotal change by barring both banks and financial technology companies (fintechs) from providing international money transfer services directly. Banks, however, are permitted to act as agents, while fintech companies are explicitly restricted from obtaining approval for IMTO services.

The directive, encapsulated in the Bank and Other Financial Institutions Act (BOFIA) of 2020, extends the prohibition of employing certain individuals within banks to IMTOs. This includes individuals in management positions, shareholders, and officers of a bank.

In a notable expansion of regulatory control, the new guidelines encompass fintech companies, aligning with the CBN’s commitment to tightening oversight and compliance with banking regulations. The overarching goal is to ensure stability and integrity within Nigeria’s financial system.

The monumental increase in the application fee is accompanied by stringent requirements for IMTOs wishing to operate in Nigeria. The application process mandates a non-refundable fee of N10 million, or any specified amount set by the CBN, payable through electronic transfer or bank draft.

Alongside this, IMTOs must present evidence of tax clearance and incorporation documents for indigenous entities, including a certified true copy of the Memorandum and Articles of Association with a primary object clause indicating the provision of money transfer services.

Moreover, an annual renewal requirement has been established, necessitating a renewal fee of N10 million or any amount specified by the CBN, payable by January 31 of each year.

This bold move by the CBN reflects a strategic approach to fortify regulatory measures and reshape the landscape of international money transfers within Nigeria’s financial ecosystem.