According to BOFIA 2010, the Central Bank of Nigeria has the regulatory power to issue IMTO license, and regulatory guidelines on international money transfers in Nigeria from time to time.
In January 31, 2024, the CBN releases a revised guidelines and licensing and operations of international money transfer operators in Nigeria. The guidelines prohibited deposit money banks and financial technology companies (fintechs) from international money transfer services.
“All banks are prohibited from operating International Money Transfer services but can act as agents.
“Also, Financial Technology Companies are not allowed to obtain approval for IMTO.
“The provisions of BOFIA 2020 on the prohibition of employment of certain persons in banks shall also apply to IMTOS.”
The apex bank also excludes individuals from the management of banks, shareholders, and officers of a bank.
In the previous guidelines issued in 2014, only deposit money banks were prohibited. However, the CBN has extended the ban to fintechs.
Requirements for Application and Obtaining IMTO License in Nigeria
- N10 million application fee
- Proof of approval to operate in other jurisdictions
- Certificate of incorporation in Nigeria
- Tax clearance
- Proof of mimium of $1 million paid up initial share capital
Payment of N10 Million Application Fee
Any institution applying for IMTO license shall pay a non-refundable application fee of N10 million. The application fee was initially N500,000 in 2014 but has been increased to N10 million in the revised guidelines issued by the apex bank on January 31, 2024. This shows an increase of about 1,900% within 10 years interval.
“A non-refundable application fee of N10,000,000.00 (Ten Million Naira only) or such other amount that the Bank may specify from time to time; payable to the CBN through electronic transfer or bank draft.
Approval to Operate in Other Jurisdictions
Any IMTO intending to obtain a license to operate in Nigeria shall submit along its application the “approval to operate in other jurisdictions or agency agreement (for all IMTOs). This means the IMTO show evidence that has gotten licenses to operate in other foreign countries or it has entered into agreement with other IMTOs operating in other countries.
Certificate of Incorporation in Nigeria
The intending IMTO must register with the Nigeria’s Corporate Affairs Commission and shall submit the certificate of incorporation with the certified true copy of the company’s Memorandum and Article of Association, stating the primary object of the business as money transfer services.
Tax Clearance
The company shall also submit a tax clearance certificate
The guidelines says: “Evidence of tax clearance and incorporation documents in Nigeria (for indigenous IMTOS) to include Memorandum and Articles of Association (Certified True Copy), of which the primary object clause shall indicate provision of money transfer services.”
$1 million Initial Share Capital
The CBN also established a minimum operating capital requirement for International Money Transfer Operators (IMTOs) at $1 million for foreign entities and an equivalent amount for local IMTOs.
Previously, it was N2 billion for Nigerian companies and N50 million or its equivalent for foreign companies.
The IMTO intending to operate in Nigeria shall submit its application with all the above documents to the Director, Trade and Exchange Department.
Annual License Renewal Fee of N10 Million
IMTO will also have pay an annual renewal fee of N10 million Naira, or any amount that the apex bank may specify from time to time; payable to the CBN through electronic transfer or bank draft on or before 31st January of the year.
The CBN IMTO guidelines also stated that the renewal of IMTO approval shall be done within the first quarter of every year, and failure to avail its agent bank a copy of CBN renewal of its IMTO approval for that year within the first quarter of the year, the bank should cease any further transaction with the IMTO.