Why Nigeria’s Central Bank removed restrictions on domiciliary accounts

Nigeria’s apex bank, the Central Bank of Nigeria (CBN) has explained reasons for the removal of limits on domiciliary accounts, allowing account holders to have unrestricted access to their funds. In a statement titled ‘CBN Issues Further Guidance on Operational Changes to Foreign Exchange Market,’ the CBN stated that individuals with ordinary domiciliary accounts would now enjoy unfettered access to their funds. Additionally, they will be able to make daily withdrawals of up to $10,000.

Under the new regulation, account holders can freely deposit funds into their domiciliary accounts and have unrestricted access to their money. They are also permitted to make cash deposits not exceeding $10,000 per day or its equivalent via telegraphic transfer.

It added that Deposit Money Banks (DMBs) are required to submit returns to the CBN, including the purpose of such transactions. Cash deposits into domiciliary accounts will not be subject to restrictions, as long as DMBs comply with proper Know Your Customer (KYC) procedures, conduct due diligence, and adhere to existing Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) laws and regulations.

Earlier reports indicated that banks had imposed limits on transfers from domiciliary accounts, affecting cash lodgements. However, with the latest announcement from the CBN, those limits have been lifted, allowing account holders to have more flexibility in managing their funds.

This development by the CBN aligns with efforts to promote a more open and accessible foreign exchange market. By removing the limits on domiciliary accounts, individuals can enjoy greater freedom in depositing and withdrawing funds, facilitating ease of transactions for various purposes. As always, banks are required to ensure compliance with relevant regulations and maintain the necessary due diligence to prevent illicit financial activities.

The removal of saving and withdrawal limits on domiciliary accounts is expected to provide account holders with greater control over their finances and promote a more efficient foreign exchange market.