CBN Collaborates With Law Enforcement To Monitor Banking Sector Recapitalisation And Prevent Illicit Financing

*Removes Limit On PAPSS For Trade Payment Services

The Central Bank of Nigeria is set to closely monitor the Nigerian banking sector’s recapitalisation alongside law enforcement agencies.

This move is intended to prevent the influx of illicit financing into the sector.

The Director of the Financial Policy and Regulation Department at the CBN, Haruna Mustafa, disclosed this in a circular on Friday.

The circular was addressed to commercial, merchant, and non-interest banks, including promoters of proposed banks, on the new minimum capital requirements for banks.

With the collaboration of relevant law enforcement agencies, the bank aims to ensure that the capital raised during the recapitalisation process is free from the taint of illegality.

Also,the Central Bank of Nigeria (CBN) has removed limits placed on trade and payment services transactions on the Pan African Payment and Settlement System (PAPSS).

PAPSS is a cross-border, financial market infrastructure enabling payment transactions across Africa.

The CBN disclosed this in a circular signed by Hassan Mahmud, director, trade and exchange department.

This followed the recent liberalzation of the Nigerian Foreign Exchange Market and the CBN initiatives to boost foreign exchange inflows, particularly through the facilitation of intra-Africa continental trade.

In July 2023, the apex bank pegged the amount of dollars to be transacted on the PAPSS at $200,000 per quarter by authorised dealer bank (ADB) and $20,000 per quarter for a customer.

“We hereby revise our Circular – RefTEO/FEM/PUB/FPC/011005 issued on July 25, 2023, on the above subject, as follows: removal of ail restrictions and limits on Pan African Payment and Settlement System including US$20,000 and US$200,000 quarterly limits per Individuals and Authorised Dealer Banks (ADBs), respectively, removal of the restrictions of ‘ONLY’ trade backed and inwards transactions.

ADBs are allowed to source for FX for settlement of PAPSS transactions through the Nigerian Foreign Exchange Market -with no recourse to the CBN

All export proceeds repatriation under PASS shall be subject to certification by the respective processing banks, and all documentation requirements stipulated in the CBN foreign exchange manual and extant circulars shall continue to apply.