CBN gives banks nod to trade idle FX deposits in domiciliary accounts 

The Central Bank of Nigeria (CBN) has given banks the nod to trade with tradeable foreign currencies deposited in domiciliary accounts created under the foreign currency disclosure, deposit, repatriation, and investment scheme which were not invested immediately. The apex bank said this in its recently approved guidelines for the implementation of foreign currency disclosure, deposit, repatriation, and investment scheme which was billed to commence on Monday November 6, 2024. The CBN said that the foreign currency deposits being invested by the banks should be made available upon request by participants. Furthermore, the apex bank noted that approved banks should provide monthly returns from the scheme no later than the 14th of the next month. It said, “CMNIBs may trade with any deposited ITFC not immediately invested by a participant, provided that the funds would be made available to the participant when needed.” 
“Interest on Uninvested Funds Interest payment by CMNIBs on the balance in the designated domiciliary account shall be in line with relevant provisions of the Guide to Charges by Banks and Other Financial Institutions in Nigeria.” It said that “Every CMNIB shall render monthly returns, in line with a template to be advised by the Banking Supervision Department, to the Bank on the operation of the Scheme not later than the 14th day of the following month.” The CBN in the guideline also required all banks participating in the Scheme to submit detailed reports to ensure transparency and effective oversight.
Such reports must include the total number of participants currently enrolled in the Scheme, as well as the total value of Investment Funds Transfer Certificates (ITFC) received both during the reporting period and cumulatively for the financial year. Additionally, banks are required to provide an update on applications received and processed, including any notable trends or challenges encountered during the review process, and also disclose all financial transactions conducted under the Scheme, specifying the investments made in permissible instruments and sectors. It warned that any uninvested ITFCs must also be accounted for, ensuring that the CBN is informed of the total value of funds that remain unallocated. Finally, it stated that banks must submit a statement of uninvested ITFCs held with the CMNIB along with a record of transactions such as trades, investments, and loans funded from these uninvested ITFCs. The CBN guideline said that it may also request additional information to support its monitoring and evaluation efforts.