Banking Updates: Recent Landmark Regulations, Legislation & Case Law Affecting The Banking & Finance Sectors April 2017 Edition

This newsletter brings to readers monthly, a synopsis of regulations, and directives as issued by the Central Bank of Nigeria (CBN) and the FMDQ OTC Securities Exchange (FMDQ), as well as case law and legislation affecting the banking and loan segments of the Nigerian financial sector.

In this edition, focus is placed on regulations that encourage participation by Small and Medium Scale Enterprises (SMEs) in the foreign exchange (FX) market; the establishment of a special FX window for investors and end-users; and a reduction in documentary requirements for import and export transactions in Nigeria. Also featured in this edition is the revised guide to charges by banks and other financial institutions as well as updates on the CBN’s cashless policy initiative. Notably, there are no industry-specific legislative and case-law updates for the period under review.

FOREGN EXCHANGE PAYMENT FOR SMALL SCALE IMPORTATION

In a bid to accommodate all stakeholders in the FX market, the CBN has via a Circular dated April 10, 2017 (referenced TED/FEM/FPC/GEN/01/002) and addressed to all Authorised Dealers and the general public, created a special FX window for Small and Medium Enterprises (SMEs). The establishment of this special FX window became necessary after the CBN realized that SMEs were being crowded out from the FX market by larger firms. This special FX window allows payments for eligible imports valued at a maximum of $20,0000.00 (Twenty Thousand United States Dollars), per customer and per quarter, to be effected by telegraphic transfer. These payments are, however, subject to the completion of a Form ‘M’ supported with a Proforma Invoice (PFI) and the importer’s BVN.

The CBN has instructed that all processing banks ensure that importers submit all relevant documents by no later than 60 days from the date of the transfer. Processing banks are also required to render monthly returns upon submission of final shipping documents to the Director, Trade and Exchange Department.

Further to the above referenced Circular, the CBN pursuant to a subsequent Circular dated April 18, 2017 (referenced TED/FEM/FPC/GEN/01/003), introduced a new Form ‘Q’ to be used by SMEs...

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