*Removes limit on PAPSS for trade payment services
The Central Bank of Nigeria has vowed to closely monitor the Nigerian banking sector’s recapitalization alongside law enforcement agencies.
The bank made the pledge on a day it also announced the removal of limits placed on trade and payment services transactions on the Pan African Payment and Settlement System (PAPSS).
In a circular, the Director of the Financial Policy and Regulation Department at the CBN, Haruna Mustafa, explained that the move to monitor the banks’ compliance with the new minimum recapitalization is to prevent influx of illicit financing into the sector.
The circular was addressed to commercial, merchant, and non-interest banks, including promoters of proposed banks, on the new minimum capital requirements for banks.
With the collaboration of relevant law enforcement agencies, the bank aims to ensure that the capital raised during the recapitalization process is free from the taint of illegality.
In another circular signed by Hassan Mahmud, director, trade and exchange department, the CBN said it has also removed limits placed on trade and payment services transactions on the Pan African Payment and Settlement System (PAPSS).
PAPSS is a cross-border, financial market infrastructure enabling payment transactions across Africa.
Mahmud said the development followed the recent liberalization of the Nigerian Foreign Exchange Market and the CBN initiatives to boost foreign exchange inflows, particularly through the facilitation of intra-Africa continental trade.
In July 2023, the apex bank pegged the amount of dollars to be transacted on the PAPSS at $200,000 per quarter by authorized dealer bank (ADB) and $20,000 per quarter for a customer.
“We hereby revise our Circular – RefTEO/FEM/PUB/FPC/011005 issued on July 25, 2023, on the above subject, as follows: removal of ail restrictions and limits on Pan African Payment and Settlement System including US$20,000 and US$200,000 quarterly limits per Individuals and Authorized Dealer Banks (ADBs), respectively, removal of the restrictions of ‘ONLY’ trade backed and inwards transactions.
ADBs are allowed to source for FX for settlement of PAPSS transactions through the Nigerian Foreign Exchange Market -with no recourse to the CBN
All export proceeds repatriation under PASS shall be subject to certification by the respective processing banks, and all documentation requirements stipulated in the CBN foreign exchange manual and extant circulars shall continue to apply.
