CBN Allows Banks to Trade Deposited Foreign Currencies Under New Scheme

The Central Bank of Nigeria (CBN) has given banks the green light to engage in trading foreign currency deposits made under its new amnesty program, the “Disclosure Scheme.” This development, announced on November 5, aims to enhance financial transparency and boost economic stability. The directive was signed by CBN officials John Sonojah and Adetona Adedeji.

Launched on October 31, the “Disclosure Scheme” offers individuals and businesses a nine-month window to deposit foreign currencies with the assurance of amnesty. This initiative is part of the CBN’s efforts to strengthen Nigeria’s financial system. The scheme enables banks—whether commercial, merchant, or non-interest institutions—to trade the foreign currency deposits, referred to as Internationally Tradable Foreign Currencies (ITFCs), unless depositors choose to invest them directly. Importantly, the funds must remain accessible to depositors at any time, ensuring liquidity.

As part of their involvement in the scheme, banks must open designated domiciliary accounts for depositors, issue receipts within 24 hours of any deposits, and maintain confidentiality in line with Nigeria’s data protection regulations. They are also tasked with reporting all ITFC transactions and adhering to relevant laws, including anti-money laundering and anti-terrorism financing protocols.

For participants, the scheme provides the opportunity to convert their foreign currency deposits to Nigerian naira at the prevailing exchange rate, with no restrictions on withdrawals. With an emphasis on transparency and the flexibility to manage deposits, the initiative seeks to instill confidence in the financial sector and encourage broader participation in Nigeria’s economy.