CBN Increases IMTO Licence Application Fee by 1,900%

The Central Bank of Nigeria (CBN) has implemented a staggering 1,900% increase in the application fee for international money transfer operators (IMTO), according to revised guidelines released on January 31, 2024.

The application fee for an IMTO license has skyrocketed from N500,000 to N10 million. This significant adjustment, covering a 10-year period, has raised eyebrows and triggered concerns among stakeholders.

In addition to the astronomical fee hike, the CBN has imposed restrictions on banks and financial technology companies (fintechs) regarding international money transfer services. Banks are now prohibited from operating international money transfer services but can act as agents, while fintech companies are not allowed to obtain approval for IMTO.

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The revised guidelines, encompassing the Bank and Other Financial Institutions Act of 2020, also extend the prohibition on certain persons’ employment in banks to IMTOs. The ban now includes individuals from the management of banks, shareholders, and officers.

Key points from the revised guidelines include:

1. Application Fee Increase: The non-refundable application fee for an IMTO license has surged to N10 million, payable to the CBN through electronic transfer or bank draft. The apex bank emphasizes that this fee is subject to periodic adjustments.
2. Renewal Requirements: IMTOs must undergo an annual renewal process, also accompanied by a fee of N10 million or any amount specified by the CBN. The renewal should be completed by January 31 of each year.
3. Operating Capital Requirement: The CBN has set a minimum operating capital requirement of $1 million for foreign entities and an equivalent amount for local IMTOs. This marks a departure from the previous capital requirements.

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The CBN’s proactive regulatory stance underscores the importance of strict adherence to these guidelines. Non-compliance is met with immediate sanctions, emphasizing the central bank’s commitment to robust regulatory oversight.

This development aligns with the CBN’s broader efforts to curb foreign currency speculation and hoarding among Nigerian banks, aiming to stabilize the forex market and fortify the national currency, the naira. While this move demonstrates the CBN’s commitment to economic stability, it may introduce added complexity to remittance payments into the country. Stakeholders await further clarification on the motives and potential impact of these regulatory changes.