CBN increases IMTO licence application fee from ₦500k to ₦10m, bans fintechs from offering the service

The news:
The Central Bank of Nigeria has increased the International Money Transfer Operators (IMTOs) licence application fee from ₦500,000 to ₦10 million.
It has also announced a new minimum operating capital requirement for International Money Transfer Operators (IMTOs) of $1 million for foreign companies. The equivalent amount in naira shall effectively apply to IMTOs that operate within the country.
The initial requirement was ₦2 billion ($1.4 million) for Nigerian IMTOs and ₦50 million ($35,370) for foreign companies at today's exchange rate of $1~₦1413.625.
While the bankers’ bank previously banned deposit money banks under the 2014 guidelines from offering IMTO services, it has now expanded it to include fintechs.
This news comes after the commercial bank regulator announced plans to remove the initial limit on exchange rates quoted by International Money Transfer Operators (IMTOs), allowing market forces of supply and demand to dictate ongoing rates.

In a document signed by Hassan Mahmud, the Director of Trade and Exchange Department, and attached to a circular (pdf) issued on Thursday, January 31, 2024, the apex bank detailed the updated policies for the functioning of IMTOs in Nigeria.

According to the new regulations, businesses that want to provide services for international money transfers must submit an application to Mahmud in Abuja. After that, the CBN will approve it in two stages: initial approval or approval-in-principle (AIP) and final approval.

In addition to the minimum share capital of $1 million, intending parties must pay a non-refundable fee of ₦10 million during the application and provide evidence of tax clearance and incorporation documents, among other requirements.

While complying with these requirements can grant applicants an AIP, they can’t use the AIP to begin operations. Applicants must complete additional documentation requirements listed in the guidelines to receive final approval.

Following approval, IMTOs are subject to an annual renewal fee of ₦10 million to be paid on or before January 31 of each year or risk approval withdrawal.

The CBN stresses that all approved IMTOs must strictly abide by the regulator’s anti-money laundering (AML), combating the financing of terrorism (CFT), and countering proliferation financing of weapons of mass destruction regulations.