Share this:

Anatomy of Fintech Law

Central Bank of Nigeria issued the Revised Guidelines on International Money Transfer Services in Nigeria in January 2024. The revised Guidelines on International Money Transfer Services replaced the International Money Transfer Services Guidelines 2014.


Nigeria’s Revised Guidelines on International Money Transfer Services (the “International Money Transfer Services Guidelines”) second Nigeria’s Federal Government’s reforms to increase transparency in foreign exchange market transactions, diaspora remittances, and foreign capital inflow, and enhance ease of doing business for International Money Transfer Operators (“IMTO”).

The legitimacy of International Money Transfer Services Guidelines flows from Nigeria’s Central Bank’s (“CBN”) powers under the Central Bank Act 2007 and Banking and Other Financial Institutions Act (BOFIA) 2022.

The Supreme Court of Nigeria[1] has affirmed in decided cases that CBN’s validly issued regulations, guidelines, frameworks, or directives are subsidiary legislation in Nigeria.

In any case, the International Money Transfer Services Guidelines govern inbound international money transfer services in Nigeria.

Other principles covered under the International Money Transfer Services Guidelines are an IMTO’s ownership and control, corporate governance, and permissible activities.

International Money Transfer Operators are entities approved by the CBN to carry out fund transfers to B2B (business to business), B2C (business to customer), or individual to individual in Nigeria.

The International Money Transfer Services Guidelines do not apply to cross-border fund transfers from Nigeria to other countries, whether B2C, B2B, C2B, or between individuals.

Within a decade, the CBN has suffered a policy summersault on what currencies a Nigerian beneficiary of remittances may cash out. Now, customers cannot cash out United States Dollars from remittances in Nigeria.

The International Money Transfer Services Guidelines require IMTOs to pay beneficiaries in Naira only.

However, the International Money Transfer Services Guidelines have yet to address the World Bank’s November 2021 report significantly, stating that remittance costs are very high in Nigeria, at an average price of 8% of the sum sought to be transferred.

The CBN categorized remittance, traditionally seen as diaspora payments to the home country, with other capital investment payments such as cross-border fund transfers.

Salaries of young tech service providers resident from offshore employment are examples of such cross-border fund transfers, which the CBN classified as a remittance.

We note that deposit money banks, including Fintech, can act as agents to IMTOs but cannot carry out international money transfer services as operators. This prohibition allows competitiveness in global money transfer services.

Restrictions on Application for IMTO’s Licence

International Money Transfer Services Guidelines incorporated the conditions under BOFIA 2020 that exclude specific individuals from managing banks or licence applications.

Any IMTO’s proposed management must satisfy a bank’s management eligibility criteria except with the written permission of the CBN’s Governor.

The following renders IMTO’s board members and management ineligible for a licence or susceptible to a licence revocation:

  1. Unsoundness of mind.
  2. Ill health is likely to impair the ability to perform official functions.
  3. Bankruptcy or suspended payments or compounding credits.
  4. A criminal conviction involving dishonesty or fraud.
  5. Guilty of serious misconduct about duties.
  6. She is disqualified or suspended professional in Nigeria.

 Licencing Requirement of an IMTO

The CBN phased the application for International Money Transfer Services’ licence into AIP (Approval-in-Principle), and final approval is also known as a commercial licence.

An applicant for IMTO’s licence must submit the following to CBN’s Director, Trade & Exchange Department:

  1. Proof of payment of the non-refundable ten million Naira application fee and a request for an IMTO licence.
  2. Approval to operate in other jurisdictions.
  3. Evidence of tax clearance and incorporation documents certified by the CAC (Corporate Affairs Commission) – object clause must include IMTS.
  4. The ownership structure includes BOs (Beneficial Owners) and the board of directors’ approval to offer
  5. Company’s, board members, and management’s profiles and bio data.
  6. Shareholders, directors, and key officers’ credit reports from CBN licenced Credit Bureau
  7. The minimum authorized share capital is US$1 million for foreign IMTOs and the equivalent for indigenous IMTOs.

Should the CBN issue an AIP, the entity must request final approval within three months. An AIP does not authorize the IMTO to begin commercial operations. AIP is limited to pre-operational processes such as opening bank accounts.

A final approval request must be submitted alongside the following:

  1. Name the DMBs that act as the authorized dealer banks and the relevant contract.
  2. Business objectives and internal control protocols.
  3. A business plan will include business objectives, internal control protocols, physical safety and security policies, three-year final projections, transaction process flow, consumer protection and dispute resolution frameworks, and information technology policies.
  4. Enterprise risk management framework, disaster recovery, business, and contingency continuity plans.
  5. Draft contracts with participating partners and project development plans.


The revised International Money Transfer Services Guidelines include the anti-money laundering regime that also combats financing of terrorism and countering proliferation of weapons of mass destruction.

Nigeria’s relevant anti-money laundering legislation includes Money Laundering (Prohibition and Prevention) Act 2022, Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation of Weapons of Mass Destruction in Financial Institutions Regulations 2022, Customer Due Diligence Regulations 2023, and Guidance Notes on Politically Exposed Persons 2022.

An IMTO must renew its licence before the 31st of January in the following year at the sum of ten million Naira or any other CBN-reviewed fee.

DMB will cease doing business with IMTO that fails to show proof of renewal of its licence after the first quarter of each year.

Furthermore, CBN approval is required when an indigenous IMTO seeks to partner with a foreign technical partner.

Subject to CBN’s due diligence, the technical partner must be established in its home country as an international money transfer services provider.

An IMTO must have a physical office in Nigeria and inform its customers of its business hours.

Charges must be transparent, and an agent must not charge additional fees for IMTS.

Engagement of Agents

The onboarding criteria for an IMTO’s agent must include a documented contract allocating liabilities to the IMTO, services rendered, and customers’ rights, which must conform to the CBN’s Consumer Protection Framework and Consumer Protection Regulations and data control obligations.

An IMTO must open a settlement account of a nominee type with a DMB. The IMTO uses the settlement accounts for payments to customers only.

IMTOs must retain all customers’ financial transaction data for at least five years. This requirement is in addition to the CBN’s daily, weekly, and monthly returns.

Permissible Activities

Although the International Money Transfer Services Guidelines regulate inbound, outbound international money transfer services are excluded.

Given the weak regulatory links and the bank’s use of US dollars in offshore accounts as collateral for local lending, the International Money Transfer Services Guidelines may fail to achieve its main objectives.

It is likely to increase the cost of remittances and weaken the Naira against the United States Dollars.

All customer payments are in Naira through a bank account or cash, where the funds are less than US$200. Banks must apply the prevailing rate in the Nigerian Foreign Exchange Market.


Inbound international money transfer services are high-volume transactions in Nigeria. Financial technology services providers cannot request an IMO licence. Fintech can leverage agency banking technology to offer cash-out services to under-banked customers.

Nigeria’s international money transfer services sector has become more competitive, organized, and well-governed.

[1] OGBOJA VS. ACCESS BANK PLC (2016) 2 NWLR (PT. 1496) PAGE 291 AT 296 RATIO 4.

SRJ is a Fintech and digital banking law firm. We supplement our Fintech & digital banking practice with retail, education law, and commercial litigation or dispute.

Read Next Month's Topic:


Read Last Month's Topic:

Did you find this article helpful?

Book a consultation with SRJ today to get more personalized answers to your fintech legal questions. Click the button below to schedule a free 15-mins consultation.