CBN Bans Foreign Banks from Facilitating Deposits And Other Banking Business

The Central Bank of Nigeria (CBN) has restricted foreign banks from facilitating deposits or current account, savings account or other similar account, paying or collecting cheque drawn by or paid in by customers and other activity categorised as banking business.

In its guidelines for the Regulation of Representative Offices of Foreign Banks in Nigeria, the apex bank listed non-permissible activities for foreign banks operating in Nigeria.

The guideline stated: “Approved Representative Offices shall not engage in the following services/activities; Provision of services designated in Nigeria as banking business; Provision of any commercial or trading activity that may lead to the issuance of invoices for services rendered; and Acceptance of orders on behalf of the foreign parent; and engage directly in any financial transaction.”

The guideline explained that foreign bank operating in the country are representative offices and as such are only expected to show case the brand and services of their parent companies.

“Representative offices of foreign banks serve an important purpose of showcasing the brand and services of its parent company. It can also stimulate foreign direct investment to the host country by connecting capital to various investment opportunities.

“It is in view of these that the CBN issues these guidelines, to specify the requirements for the licensing and operations of approved representative offices of foreign banks in Nigeria.”