The Central Bank of Nigeria (CBN) has directed all International Money Transfer Operators (IMTOs) to open and maintain naira settlement accounts with authorised dealer banks, effectively restructuring how diaspora inflows are processed within the financial system.
The directive, which takes effect May 1, 2026, introduces a more centralised framework for tracking, pricing, and settling remittance flows.
From Fragmented Flows to Controlled Channels
Under the new rule, all IMTO-related transactions, including inflows, beneficiary disbursements, and FX conversions, must be routed exclusively through designated naira settlement accounts held within Nigeria’s banking system. These accounts can only be funded through remittance inflows and proceeds from foreign exchange conversions, limiting alternative funding routes and tightening transaction traceability.
In practical terms, the CBN is reducing the opacity that has historically characterised parts of the remittance ecosystem.
The FX Market Angle
Diaspora remittances remain one of Nigeria’s most stable sources of foreign exchange. By forcing flows through authorised dealer banks, the CBN is effectively redirecting more FX supply into the formal market, where it can be tracked, priced, and potentially stabilise exchange rate dynamics.
The introduction of pricing guidance tied to Bloomberg BMatch further reinforces this objective. By anchoring IMTO rates to near real-time market data, the CBN is attempting to reduce pricing arbitrage and narrow the gap between official and parallel market rates.
Transparency vs. Flexibility
IMTOs must now:
- Route all transactions through regulated banking channels
- Maintain clearly designated settlement accounts
- Submit account details and periodic updates to the CBN
- Align pricing with market benchmarks
While these measures enhance transparency and auditability, they may reduce flexibility for operators accustomed to more fragmented settlement structures.
The broader objective is to
- Increase formal FX inflows
- Improve price discovery
- Strengthen anti-money laundering and compliance frameworks
- Reduce leakages within the remittance value chain
By tightening control over how remittances enter and circulate within the system, the CBN is reinforcing its grip on a critical FX channel.
What This Means
For banks, the directive increases their role as primary intermediaries in remittance flows, potentially boosting liquidity and transaction volumes.
For IMTOs, it signals a shift toward stricter compliance and reduced operational latitude.
For the FX market, the policy could support greater transparency, but its effectiveness will depend on enforcement consistency and whether it meaningfully shifts flows away from informal channels.
In the long term, the success of the policy will hinge on a familiar challenge: whether tighter regulation can coexist with incentives strong enough to keep remittance flows within the formal system.
