Nigerian Banks To Stop “Instant Completion” For Forex Transfers Online

Commercial Banks in Nigeria are informing customers that they can no longer make instant online transfers out of their domiciliary accounts without proper documentation.

Before now, all a customer had to do was log into their banking application on their mobile phone or via a browser to make transfers without the need to provide any documentation. However, emails sent to customers by banks as seen by Nairametrics contain new documentation requirements that must be provided before the transfers are allowed to proceed.

Here is an excerpt of an email seen by Nairametrics

“This is to inform you that instant completion for international transfers on our digital platforms will cease from March 20, 2021. All international third-party transfers initiated on any of our digital channels will be completed at the back office after receipt of relevant supporting documents. Kindly ensure you send relevant supporting documents for your international transfers immediately transaction is initiated online to……….”

The bank also advised its customers on the type of supporting documents required as follows;

“Samples of supporting documents to be provided for international transfers to third parties are;

•Invoices
•Bills
•Demand Notes, etc

“For Medical, insurance, school fees, subscriptions and other similar invisible payments. For transparency and in line with CBN eligibility requirement, purpose of payment must be clearly indicated for all international transfers in the narration section provided.”The advice from the bank also informed its customers that transfers that do not include the supporting documents listed above will be rejected after the assigned cut off time.

“Please note that for control purposes, all payments initiated without the relevant supporting documents being sent to the above noted email will be rejected after the existing currency cut-off time (EURO- 1.30PM, GBP & Others- 2.30PM and USD- 3.30 PM) same day.”

What this means

Nairametrics inquired from one of the banks to get an understanding of what this means and how it affects customers seeking to make transfers.

•To make the transfer, you will attach documents via email and then wait for them to be approved by the backroom staff of the banks before the transfer is finalized. Without the approval of those in the backroom, the transfer will not be completed.•Transfer from your account to your personal account – We understand this will not be affected by this rule as no supporting document is required to make transfers from your personal account to another personal account or from one company account to the same account overseas.

•Transfer from your account to a third party – You will be required to provide any of the respective documentation required above for any transfer between your account and a third-party account abroad.

•This rule will affect how people transfer forex from one account to another and will impact everything from you transferring money to your spouse, sibling, or family member, payment of invoices, and other forms of online transfer that did not need documentation.

Why this matters

Nairametrics analysts understand this is yet another attempt by the central bank to track the flow of forex within the banking system, reducing incidences of undocumented transfers or currency exchanged occurring outside of the banking sector.

•Critics believe this is another desperate attempt by the apex bank to restrict foreign currency flows via banks and outside of the official systems.

•Millions of dollars of transactions occur on a daily basis outside the banking system as Nigerians prefer to transact foreign exchange at black market rates rather than the official rates which they do not believe reflects the true value of the exchange rate.•This rule will gross affect Nigerians seeking to make peer to peer cryptocurrency transfers as they will not need to provide documentation for their transfers to be processed.

– Nairametrics