Central Bank of Nigeria's Credit Guidelines 2022 - 2023

Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2022/2023
CENTRAL BANK OF NIGERIA
MONETARY, CREDIT, FOREIGN TRADE

AND EXCHANGE POLICY GUIDELINES
FOR FISCAL YEARS 2022/2023
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JANUARY, 2022
(MONETARY POLICY CIRCULAR NO. 44)
Contents
SECTION ONE ..................................................................................................................................................................................................................7
1.0. INTRODUCTION ....................................................................................................................................................................................7
SECTION TWO ...............................................................................................................................................................................................................10
2.0. REVIEW OF THE POLICY ENVIRONMENT AND MACROECONOMIC DEVELOPMENTS IN 2021 .................................10
2.1 Policy Environment ..........................................................................................................................................................................10
2.1.1 Monetary and Credit Developments .............................................................................................................. 11

2.2 Domestic Macroeconomic Developments ............................................................................................................................12
2.3 Macroeconomic Issues and Policy Challenges in 2020/2021.........................................................................................22
2.3.1 Policy Challenges .............................................................................................................................................. 22

2.4 Outlook for the Domestic Economy in 2022/2023 ................................................................................................................23
2.4.1. Macroeconomic Issues and Policy Challenges in 2022/2023 ....................................................................................................26
SECTION THREE .........................................................................................................................................................................................................28

3.0. MONETARY AND CREDIT POLICY MEASURES FOR 2022/2023 .............................................................................................28
3.1 Objectives and Strategy of Policy..............................................................................................................................................28
3.2 Policy Measures ................................................................................................................................................................................29
3.2.1 Open Market Operations .................................................................................................................................. 29

3.2.2 Reserve Requirements ...................................................................................................................................... 30
3.2.2.1 Cash Reserve Ratio ............................................................................................................................................ 30
3.2.2.2 Liquidity Ratio ..................................................................................................................................................... 31
3.2.3 Net Open Position ............................................................................................................................................. 31
3.2.4 Net Foreign Currency Trading Position .......................................................................................................... 33
3.2.5 Foreign Exchange Interventions ..................................................................................................................... 33
3.2.6 Foreign Exchange Interventions in Renminbi ............................................................................................... 34
3.2.7 Over-the-Counter Futures Trade Transactions – N1.0 Billion Pledge by ODCs ...................................... 35
3.2.8 Discount Window Operations .......................................................................................................................... 36
3.2.8.1 Standing Facilities .............................................................................................................................................. 36
(i) Standing Lending Facility .................................................................................................................................. 36
(ii) Standing Deposit Facility ................................................................................................................................... 37
(iii) Intra-day Liquidity Facility ................................................................................................................................ 38
3.2.8.2 Non-Interest Financial Instruments .................................................................................................................. 38
(i) CBN Safe Custody Account ............................................................................................................................. 39
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(ii) CBN Non-Interest Note ...................................................................................................................................... 39

(iii) CBN Non-Interest Asset Backed Securities .................................................................................................... 40
(iv) Funding for Liquidity Facility ............................................................................................................................. 40
(v) Intra-day Facility ................................................................................................................................................ 41
3.2.8.3 Special Bills.......................................................................................................................................................... 42
3.2.9 Federal Government of Nigeria Instruments................................................................................................. 44
3.2.10 Interest Rate Policy ............................................................................................................................................ 45
3.2.11 Determination of Banks’ Cost of Funds ........................................................................................................... 50
3.2.12 Framework for the Implementation of Risk-Based Interest Pricing Model ................................................ 51
3.2.13 Opening of New Accounts ............................................................................................................................... 52
3.2.14 Ways and Means Advances ............................................................................................................................ 53
3.2.15 Treasury Single Account ................................................................................................................................... 54
3.3 Supervisory Measures .........................................................................................................................................................56
3.3.1 Guidelines on Regulatory Capital ................................................................................................................... 56
3.3.2 Basel Core Principles’ Self-Assessment and Financial Sector Assessment Programme ........................ 58
3.3.3 Publication of Defaulters of Foreign Exchange Policy on PTA/BTA ....................................................... 59
3.3.4 Sale of Foreign Exchange to Retail Customers at Bank Branches ............................................................ 59
3.3.5 Policy Stance on Crypto-Currency Transactions ......................................................................................... 60
3.3.6 Stimulating Long Term Lending ....................................................................................................................... 60
3.3.7 Issuance and Treatment of Bankers Acceptances and Commercial Papers. ....................................... 61
3.3.8 Credit Risk Management ................................................................................................................................. 61
3.3.9 Publication of Annual Financial Statements ................................................................................................. 65
3.4 The Payments System ........................................................................................................................................................66
3.4.1 Payments System Vision .................................................................................................................................. 67
3.4.2 Security of the Payments System .................................................................................................................... 67
3.4.3 Operation of the Bank Verification Number ................................................................................................. 73
3.4.4 Cash-less Policy ................................................................................................................................................ 74
3.4.5 Shared Agency Network Expansion Facility ................................................................................................. 75
3.4.6 Fees and Charges ............................................................................................................................................. 76
3.4.7 Sanctions on Erring Banks/E-payment Service Providers for Infractions of Payments System Rules and Regulations ............. 76
3.4.8 Cheque Processing........................................................................................................................................... 77

3.5 Other Policy Measures ...................................................................................................................................................................81
3.5.1 Development Finance Policies ........................................................................................................................ 81
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3.6 Orderly Development of the Banking System .................................................................................................................... 100
3.6.1 Bank Credit Expansion ................................................................................................................................................... 100

3.6.2 Prudential Guidelines for Licensed Banks ................................................................................................... 101
3.6.3 Capital Adequacy .......................................................................................................................................... 102
3.6.4 Responsibilities of Banks’ External Auditors to the Supervisory Authorities ............................................ 103
3.6.5 Returns from Banks .......................................................................................................................................... 106
3.6.6 Penalties for Default ........................................................................................................................................ 107
3.6.7 Transparency in Financial Transactions ....................................................................................................... 107
3.7 Risk-Based Supervision .................................................................................................................................................................. 111
3.7.1 Consolidated Supervision of Nigerian Banks .............................................................................................. 111

3.7.2 Cross Border Supervision................................................................................................................................ 112
3.7.3 Macro-Prudential Regulation and Stress Testing ........................................................................................ 113
3.7.4 Sanctions for non-compliance with extant AML/CFT Laws and Regulations ......................................... 113
3.7.5 Weights for Risk Weighted Assets Computation ......................................................................................... 114
3.7.6 Risk Management, Corporate Governance and Whistle blowing ........................................................... 114
3.7.7 Additional Disclosures by Banks ................................................................................................................... 115
3.7.8 Supervisory Intervention Framework for the Banking Industry .................................................................. 115
3.7.9 Regulation and Supervision of Domestic Systemically Important Banks in Nigeria .............................. 116
3.7.10 Cyber Security Surveillance ........................................................................................................................... 116
3.7.11 Cyber Security Fund ........................................................................................................................................ 117
3.7.12 Lending to the Real Sector.............................................................................................................................. 117
3.7.13 Charging of Penalty by Non-Interest Financial Institutions ........................................................................ 118
3.7.14 Curbing the Activities of Illegal Fund Managers ......................................................................................... 121
3.7.15 National Roadmap on Sustainable Finance ................................................................................................ 121
3.7.16 Competency Framework and Approved Persons’ Regime ...................................................................... 122
3.8 Regulation and Supervision of Other Financial Institutions ........................................................................................... 122
3.8.1 Supervisory Methodology .............................................................................................................................. 122

3.8.2 Liquidity Ratio ................................................................................................................................................... 123
3.8.3 Capital Adequacy Requirements ................................................................................................................ 123
3.8.4 Limit on Foreign Currency Borrowings ......................................................................................................... 123
3.8.5 Uniform Accounting Year-end and Compliance with International Financial Reporting Standards . 124
3.8.6 Supervisory Intervention Framework ............................................................................................................ 124
3.8.7 Other Policy Measures ................................................................................................................................... 125
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4 FOREIGN TRADE & EXCHANGE POLICY MEASURES .................................................................................................................. 146
4.1 New Policy Measures ........................................................................................................................................................................ 146
4.1.1. Items ‘Not Valid for Forex’ ................................................................................................................................................... 146
4.1.2 Price Verification System ............................................................................................................................... 147

4.1.3 e-Valuator and e-Invoice .............................................................................................................................. 148
4.1.4 Digital Marine Insurance Certificate ............................................................................................................. 148
4.1.5 e-Form ‘NCX’ ................................................................................................................................................... 149
4.1.6 e-Form ‘A’ ......................................................................................................................................................... 149
4.1.7 Payment of Diaspora Remittances by International Money Transfer Operators .................................... 150
4.1.8 Naira 4 Dollar Scheme .................................................................................................................................... 150
4.1.9 Pan African Payments and Settlement System .......................................................................................... 151
4.1.10 RT200 Non-Oil Export Proceed Repatriation Rebate Scheme ............................................................................. 151
4.2 Policy Measures Retained .......................................................................................................................................................... 152
4.2.1 Electronic Certificate of Capital Importation ............................................................................................... 152

4.2.2 e-Form ‘NXP’ ..................................................................................................................................................... 153
4.2.3 Form ‘Q’ ............................................................................................................................................................. 153
4.2.4 Restriction on Sales/Utilisation of Foreign Exchange .................................................................................. 154
4.2.5 Exemptions from foreign exchange restrictions/utilisation ....................................................................... 155
4.2.6 Importation of Foreign Currency .................................................................................................................. 156
4.2.7 Foreign Exchange Importation by Oil and Oil Servicing Companies ................................................... 156
4.2.8 Repatriation of export proceeds .................................................................................................................. 157
4.2.9 Export Proceeds Domiciliary Accounts ....................................................................................................... 158
4.2.10 CBN Foreign Exchange Interventions Funds ................................................................................................ 159
4.2.11 Remittances of Retirement Benefits by Foreign Nationals ......................................................................... 159
4.2.12 Remittance of Family Maintenance Allowance by Foreign Nationals .................................................... 160
4.2.13 Insurance Premium Remittances ................................................................................................................... 161
4.2.14 Declaration of Excess Currency Holdings at Port of Entry ......................................................................... 161
4.2.15 Advance Payment for Import ........................................................................................................................ 162
4.2.16 Foreign Currency Trading Position ................................................................................................................. 162
4.2.17 Limit of Foreign Exchange Sales by Bureau De Change ........................................................................... 163
4.2.18 Pooling of funds ................................................................................................................................................ 163
4.2.19 Application for Foreign Exchange ................................................................................................................ 164
4.2.20 Interest on Bills for Collection ......................................................................................................................... 164
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4.2.21 Government Guarantees ................................................................................................................................ 164

4.2.22 Travel Allowance Limits ................................................................................................................................... 165
4.2.23 Capital Repatriation......................................................................................................................................... 165
4.2.24 Issuance of e-Certificate of Capital Importation ........................................................................................ 165
4.2.25 Maintenance of Disbursement Accounts ..................................................................................................... 166
4.2.26 Processing of e-Form “M” by SMEs................................................................................................................ 167
4.2.27 Third Parties Transfers from Ordinary Domiciliary Accounts ...................................................................... 167
4.2.28 Selling Rate of Foreign Exchange by Authorized Dealers ......................................................................... 168
4.2.29 Foreign Currency Transactions by Hotels ..................................................................................................... 168
4.2.30 Registration of e-Forms ‘M’ for goods classified as “Not valid for Foreign Exchange” ......................... 169
4.2.31 e-Form ‘M’ Procedure for Importation of Petroleum Products .................................................................. 170
4.2.32 e-Form ‘M’ Procedure...................................................................................................................................... 171
4.2.33 Import Duty Payment ....................................................................................................................................... 173
4.2.34 Exports................................................................................................................................................................ 173
4.2.35 Invisible Trade Transactions ............................................................................................................................ 175
4.2.36 Miscellaneous Policy Measures ..................................................................................................................... 178
SECTION FIVE .......................................................................................................................................................................................................... 180
5 CONSUMER PROTECTION .................................................................................................................................................................. 180

5.1 Operational Structure ...................................................................................................................................... 180
5.2 Consumer Protection Regulation ................................................................................................................... 181
5.3 Consumer Complaints Resolution and Procedure...................................................................................... 181
5.4. Help Desks at the CBN................................................................................................................................................................ 184
5.4.1. General Complaints and Enquiries ........................................................................................................................ 184

5.4.2 eNaira Help Desk ............................................................................................................................................ 185
5.4.3 Foreign Exchange Authorized Dealers/Customers.................................................................................... 185
5.4.4 Monetary Policy Help Desk ........................................................................................................................... 186
ANNEXURE I: GLOSSARY OF TERMS ........................................................................................................................................................... 188
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SECTION ONE
1.0. INTRODUCTION
The Central Bank of Nigeria (CBN) in the 2022/2023 fiscal years will
continue to conduct monetary policy in line with the Medium-Term
Expenditure Framework (MTEF) of the Federal Government of
Nigeria (FGN) for the attainment of price and financial stability.
Monetary policy in the period shall be anchored on the dual
banking system model (risk-sharing and risk-transfer), market
expectations, fiscal-monetary policy coordination, innovative
financing, and complementary unconventional monetary policies
to respond to shocks. The 2022/2023 Guidelines coincide with the
implementation of the CBN digital currency, the eNaira, which was
launched on October 25, 2021 and the recovery from the impact
of COVID-19 pandemic.
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In line with the evolving global trend, it shall complement the
existing payment and settlement instruments during the period.
Digital Naira is expected to boost the Gross Domestic Product,
enhance revenue collection of government by blocking leakages,
support the digitalization of the economy, strengthen the
transmission mechanism of monetary policy, and promote financial
inclusion.
The implementation of eNaira shall continue in Phases with the
onboarding of both consumers and merchants. The level of
transactions permitted for various categories of economic agents
shall be based on a tiered structure in compliance with Know Your
Customers (KYC) requirements.
This document outlines the monetary, credit, foreign trade and
exchange policy guidelines applicable to banks and other financial
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institutions supervised by the CBN in 2022/2023. The Guidelines may
be adjusted by the CBN without prior notice, to address new
developments in the domestic and global economies in the period.
However, such amendments shall be communicated to the
relevant institutions/stakeholders in supplementary circulars.
This document is organised into five sections. Following the
introduction, section two reviews developments in the global and
domestic economies in 2020 and 2021 to provide a background to
the policy measures for 2022/2023 fiscal years. The monetary and
credit measures are enumerated in section three, while the
applicable foreign trade and exchange policy measures are
presented in section four. Section five concludes with consumer
protection issues while the annexures contain Prudential Guidelines,
relevant reporting formats and referenced circulars.
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SECTION TWO
2.0. REVIEW OF THE POLICY ENVIRONMENT AND MACROECONOMIC
DEVELOPMENTS IN 2021
2.1 Policy Environment
Global economic activities strengthened in 2021 due to increased
COVID-19 vaccination rates and the easing of travel restrictions in
advanced and emerging market economies. Global output growth
in 2021 was 5.9 per cent, against the projected 6.0 per cent. The
downtick revision in 2021 was triggered by the rapid spread of the
COVID-19 Delta variant and threats of new variants that increased
uncertainty around global economic recovery (World Economic
Outlook, October 2021). Advanced economies grew by 5.2 per
cent in 2021 and are expected to grow by 4.5 per cent in 2022, while
growth in developing and emerging-market economies is
projected to decline from 6.4 per cent in 2021 to 5.1 per cent by
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2022. The economy of Sub-Saharan Africa is expected to grow by
3.8 per cent and 4.1 per cent in 2022 and 2023, respectively.
2.1.1 Monetary and Credit Developments
The monetary authority sustained an accommodative policy
stance in 2021, as the outbreak of the COVID-19 pandemic and the
emergence of more transmissible variants posed considerable risks.
With inflation sustaining a downward trajectory and economic
recovery gaining traction during the review period, the monetary
authority was faced with the dilemma of a possible rate hike, which
could weigh on private sector credit growth and hinder the
recovery, or an easing of financial conditions, which could
potentially disrupt the downward path of inflation and exacerbate
capital outflows. After weighing the options, the monetary authority
posited the need to continue supporting the ongoing fledging
recovery without compromising the price stability objective.

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Consequently, the monetary authority left its key parameters
unchanged in 2021, with the monetary policy rate at 11.5 per cent
(an asymmetric corridor of +100 and -700 basis points around the
MPR), the cash reserve ratio at 27.50 per cent and the liquidity ratio
at 30.0 per cent. This stemmed from the easing stance which
commenced in 2020.
Against this background, various interventions by both the fiscal and
monetary authorities supported the flow of credit to critical sectors
of the economy.
2.2 Domestic Macroeconomic Developments
Headline inflation, which peaked at 18.17 per cent in March 2021,
maintained a steady decline to 15.40 per cent in November after
which a slight uptick to 15.63 per cent was experienced in
December 2021. The observed softer pace of inflation (year-on

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year), was due to the moderating effect of improved supply of
goods and services, on aggregate prices, following the relaxation
of the COVID-19 movement restrictions that pervaded the previous
year. Inflationary pressures were restrained by administrative
measures such as the decision to suspend increases in the price of
Premium Motor Spirit (PMS) and electricity tariffs during the year. Key
drivers of the downward trend in inflationary pressure during the
period were moderation in food inflation due to improved harvests;
an increased supply of food crops due to fewer flood incidences as
well as the effect of sustained interventions on the agricultural
sector by the FGN and the CBN.
Average crude oil production, including Agbami crude grade, was
1.46 million barrels per day (mbpd) for 2021. This represents a decline
of 12.0 per cent, below the average production of 1.66 mbpd in
2020 and 1.52 mbpd revised OPEC+ production quota. This was due
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majorly to infrastructure constraints, including persistent damage to
some key pipelines and terminals, as well as the high cost of
restarting some of the oil wells.
The performance of the external sector was impressive in the third
quarter of 2021, with an overall balance of payments surplus of
US$5.28 billion or 4.8 per cent of GDP, occasioned by sustained
global economic recovery and improved foreign exchange
receipts from the International Monetary Fund’s SDR allocation and
sale of FGN Eurobond. The current account surplus, at US$3.68 billion
(3.4 per cent of GDP), increased significantly, compared with
US$0.35 billion (0.4 per cent of GDP) in the preceding quarter of
2021. Furthermore, the financial account recorded net incurrence
of liabilities of US$3.94 billion or 2.0 per cent of GDP, compared with
US$0.44 billion in the preceding half of 2020.
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The external reserve position was US$40.2 billion at the end of
December 2021 and could finance 11.5 months of goods or 8.7
months of goods and services import, which exceeded both the
international adequacy standard and that of the West African
Monetary Zone (WAMZ) convergence criterion of three (3) months.
The naira
exchange rate remained relatively stable in the Investors &
Exporters FX Window (I&E), supported by the Bank’s exchange rate
demand management policies.
The fiscal policy thrust in 2021 aimed at consolidating the gains of
the Economic Sustainability Plan (ESP), enhancing economic
recovery, promoting diversification, boosting the competitiveness
of the economy and ensuring social inclusion. The consolidated
revenue and expenditure of the Federal Government were
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projected at N8,120.00 billion (5.7% of GDP) and N14,570.00 billion
(10.3% of GDP), respectively, resulting in an overall deficit of
N6,450.00 billion (4.5% of GDP). Thus, the consolidated public debt
rose by 14.3 per cent to N35,460.00 billion at end-June 2021,
compared with N31,010.00 billion at end-June 2020. Despite the
rising debt profile, the debt stock at 22.4 per cent of GDP remained
within the sustainable limits stipulated by the Debt Management
Strategy and the WB/IMF’s and ECOWAS’ thresholds (40.0, 55.0 and
70.0) per cent of GDP, respectively. The Federal Government has
taken steps to improve the tax administration framework,
leveraging technology and automation, and the 2021-2025
National Development Plan, which is expected to accelerate
economic growth to achieve macroeconomic stability and reduce
poverty and inequality.
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The fiscal space is expected to improve in 2022 due to the prospect
of a sustained global economic recovery and implications for
energy demand and prices, particularly, for oil exporting countries.
The OPEC+ in May 2021 commenced easing its initial production
cuts, oil prices steadily rallied from US$14.28 pb in April 2020 to
around US$78.11 pb in October 2021 in response to the upsurge in
global energy demand.
The domestic economy grew by 5.0 per cent in the second quarter
of 2021, buoyed by the strong performance of the non-oil sector,
signifying a rebound in business activities. These developments
would spur revenue generation and effective implementation of
the capital projects and other investments in infrastructural facilities,
as well as promote job creation and poverty alleviation.
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Policy collaboration between the fiscal and monetary authorities is
crucial in the effort to sustain and strengthen growth in the future.
Overall, the ongoing structural reforms, particularly the power sector
recovery programme; financial inclusion strategy and efforts aimed
at addressing the prevailing infrastructure gaps remain the essential
elements in boosting inclusive economic growth.
Monetary policy remained largely accommodative in the first nine
(9) months of 2021. The Monetary Policy Committee (MPC) at its
September 2020 meeting, reduced the Monetary Policy Rate (MPR)
by 100 basis points to 11.5 per cent from 12.5 per cent, while the
asymmetric corridor was adjusted to +100/-700 basis points around
the MPR from +200/-500 basis points. Also, the Cash Reserve Ratio
(CRR) and the Liquidity Ratio (LR) were retained at 27.5 and 30.0 per
cent, respectively. The Loan-to-Deposit Ratio (LDR) of 65.0 per cent
also subsisted. Key monetary aggregates exhibited an upward

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trend in the review period, although lower than their indicative
benchmarks for the fiscal year 2021. Accordingly, growth in broad
money (M3) accelerated by 4.6 per cent at end-September 2021,
driven by the 10.5 per cent growth in net domestic assets which
offset the 20.4 per cent decline in net foreign assets of the banking
system. The narrow money supply (M1) declined by 0.2 per cent,
reflecting a decrease of 5.0 per cent in currency outside depository
corporations.
Reserve money increased at end-December 2021 to N13,103.09
billion, albeit at a slower pace relative to the 50.9 per cent growth
recorded at end-December 2020. The growth in reserve money
stemmed largely from the 14.3 per cent surge in currency in
circulation during the period. Liabilities to other depository
corporations, with a share of reserve money of 75.0 per cent,
declined by 2.2 per cent to N9,970.00 billion in the period, relative
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to the 63.4 per cent increase recorded at the end of December
2020. The decline was driven largely by a 45.7 per cent moderation
in other liabilities
Growth in net foreign assets and net domestic assets spurred growth
in the broad money supply above the 2021 indicative target. Broad
money supply expanded by 13.8 per cent to N43,947.27 billion at
end-December 2021, which is considerably higher than the 9.99 per
cent indicative target for fiscal 2021 and the 10.8 per cent growth
recorded at end-December 2020. The growth in broad money was
driven by the combined impact of the 6.1 and 15.6 per cent
increase in net foreign assets (NFA) and net domestic assets (NDA),
respectively. An increase in claims on non-residents by 1.0 per cent
as well as the 2.02 per cent moderation in liabilities to non-residents
contributed to the accretion in NFA. Domestic claims rose by 16.2
per cent to N49,459.37 billion relative to 15.9 per cent growth at end-
20
December 2020. This was attributed to 10.7 per cent growth in net
claims on central government, while claims on other sectors
increased considerably by 18.5 per cent from 13.3 per cent in the
preceding period. Growth in claims on private sector of 30.7 per
cent formed the bulk of the claims on other sectors; contributing
49.5 per cent to total domestic claims, as ongoing efforts to boost
credit to critical sectors of the economy continue to yield results. The
equivalent increase in monetary liabilities to 13.8 per cent during the
period was driven by 18.0, 12.9 and 18.7 per cent growth in currency
outside depository corporations, transferable deposits and other
deposits, respectively. Specifically, other deposits recorded the
largest contribution of 10.5 per cent to the growth in monetary
liabilities, driven by an increase in savings and time deposits from the
private sector.
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2.3 Macroeconomic Issues and Policy Challenges in

2020/2021
2.3.1 Policy Challenges
In 2020/2021, there were uncertainties associated with uneven
global growth, the emergence of the COVID-19 pandemic and its
variants presented a myriad of constraints on economic growth. The
world had to contend with rising inflation, high energy bills, real
estate crisis, lockdowns, supply chain breakdowns and labour
shortages. These presented challenges for both governments and
central banks to stave off the impact, thus motivating several policy
actions. These resulted in weak global business and consumer
confidence; weaker growth in external demand and a drawdown
of global inventories reflecting weak industrial production.
The domestic economy experienced a recession owing to the
collapse in oil prices coupled with the impact of restrictions in
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movement and lockdowns to curtail the spread of COVID-19. Other
challenges were infrastructure deficit, insecurity and high
unemployment.
2.4 Outlook for the Domestic Economy in 2022/2023
The outlook for the Nigerian economy is optimistic, as growth is
projected to maintain a positive trajectory. This prospect is
supported by improvement in crude oil prices, sustained monetary
and fiscal policy support and the containment of the COVID-19
pandemic. In addition, the implementation of the Petroleum
Industry Act (PIA) is expected to improve the fiscal space in the
medium-to-long term. More so, the implementation of the eNaira
portends to enhancing cost efficiency in transactions and financial
inclusion.
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However, supply shocks associated with domestic production in the
oil sector, energy shortages, new variants of coronavirus, insecurity,
and high inflation might impact economic prospects. Other
downside risks to the growth outlook include the likelihood of low
agricultural output as a result of banditry and farmers-herders
conflict.
There is optimism for the real sector of the economy in 2022 given
the near return to normalcy in the economy and improved
vaccination against COVID-19 infection. Furthermore, the economy
is expected to strengthen further in the short to medium term,
considering the height of monetary and fiscal stimuli expended in
2021 to cushion the effects of the COVID-19 pandemic, particularly,
in the real sector of the economy.
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Nigeria’s external sector outlook is positive as both the external
reserves and portfolio investments are expected to improve in the
near-term. The positive outlook is further supported by the Special
Drawing Rights (SDR) allocation from the IMF, sourcing of external
loans, increase in receipts of royalties and oil related taxes, Naira 4
Dollar initiative, the CBN foreign exchange purchases and the
Bankers’ Committee Race To US $200 billion in FX Repatriation (RT200
FX Programme). Nonetheless, intervention in the foreign exchange
market coupled with the rising import bills and increase in external
debt servicing, are potential headwinds to reserve accretion in the
near-term.
The financial sector is expected to remain sound, safe and stable,
in view of CBN’s commitment to ensure financial system stability. This
would be supported by the Bank’s regulatory and prudential
measures, which are expected to drive credit delivery. The

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measures include among others; an accommodative monetary
policy stance and regulatory forbearance policies. Furthermore,
the Global Standing Instruction (GSI) policy continues to strengthen
risk management practices and support financial sector resilience.
In the fiscal sector, there is optimism buoyed by the timely passage
of the Budget by the National Assembly, the Finance Act, rising oil
price, and infrastructural provision through tax credits for rapid
national development. However, the rising debt stock and its
attendant high debt service payments amidst low tax-
revenue/debt ratio constitute headwinds that could limit the
execution of government programmes.
2.4.1. Macroeconomic Issues and Policy Challenges in 2022/2023
The persisting insecurity situation across the country may dampen
the prospects of the economy if measures taken to address the
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problem do not yield the expected results. The rising cost of
production, owing to weak infrastructure may lead to increased
domestic prices. The continued increase in crude oil prices may
lead to an increase in the landing cost of petroleum products and
the deaccumulation of foreign reserves. However, the expectation
of the commencement of some private sector driven refineries
offers some hope.
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SECTION THREE
3.0. MONETARY AND CREDIT POLICY MEASURES FOR 2022/2023
3.1 Objectives and Strategy of Policy
In 2022/2023, the primary objective of monetary policy remains the
maintenance of price and financial system stability that is consistent
with inclusive and sustainable growth. Consequently, there would
be reliance on traditional monetary policy tools, complemented by
unconventional measures. The Bank will sustain measures to abate
inflationary pressure through effective liquidity management and
enhance the realisation of the FGN National Development Plan,
2021-2025. The Bank shall continue to be proactive in its oversight of
the banking system to maintain a sound, stable and efficient
financial system that supports the conduct of monetary policy. The
monetary targeting framework remains the monetary policy
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strategy in the period, with implicit inflation targeting. Consequently,
growth in broad money supply would remain the intermediate
target, while there would be close monitoring of short-term interest
rates to avoid volatility with the ultimate goal of anchoring
expectations in the financial markets.
3.2 Policy Measures
During the period, the Bank would deploy appropriate measures
consistent with its objectives of ensuring internal and external
balance of the economy. The measures would include the
following:
3.2.1 Open Market Operations
Open Market Operations (OMO) shall remain the primary instrument
for liquidity management. The CBN, through OMO auctions, shall
29
engage in the sale or purchase of CBN Bills and other designated
instruments as may be prescribed from time to time by the Bank,
with the objective of maintaining the banking system liquidity at
levels consistent with its monetary policy stance. The use of OMO
shall be complemented with discount window operations, including
repurchase agreements (repo) and reverse repurchase
agreements (reverse repo); foreign exchange operations and cash
reserve requirements. All authorised Money Market Dealers (MMDs)
shall be eligible participants at the auctions.
3.2.2 Reserve Requirements

Cash Reserve and Liquidity Ratios shall continue to be deployed as
prudential and liquidity management tools.
3.2.2.1 Cash Reserve Ratio
The Cash Reserve Ratio for deposit liabilities which stood at 27.5 per
cent in 2021 shall continue to apply, subject to review by the CBN in
30
line with prevailing economic and liquidity conditions. The
maintenance period for the Cash Reserve Ratio shall be as
prescribed from time to time.
3.2.2.2 Liquidity Ratio
The minimum liquidity ratio for commercial, merchant and non-
interest banks shall be retained at 30.0, 20.0 and 10.0 per cent,
respectively, subject to review from time to time. During the period,
the ratio of loans to deposits ratio shall be a maximum of 80.0 per
cent.
3.2.3 Net Open Position
The Net Open Position (NOP) limit, long or short, of the overall foreign
currency assets and liabilities, inclusive of on and off-balance sheet
items, shall not exceed 10.0 per cent of shareholders’ funds
unimpaired by losses using the gross aggregate method.
31
The aggregate foreign currency borrowing of a domestic bank,
excluding inter-group and inter-bank borrowing, shall not exceed
125.0 per cent of shareholders’ funds unimpaired by losses. Banks
are expected to adopt the following risk mitigation strategies,
amongst others:
i. All borrowings should be hedged using financial market tools
acceptable to the CBN;
ii. Borrowings must be subordinated debts with prepayments
allowable only at the instance of the bank and subject to prior
approval of the CBN; and
iii. All debts, except trade lines, shall have a minimum fixed tenor
of five (5) years.
32
3.2.4 Net Foreign Currency Trading Position
The maximum Net Foreign Currency Trading Position of Authorized
Dealers that shall be allowed is between 0.5 and -10.0 per cent of
their shareholders’ funds unimpaired by losses. This limit is to be
maintained at the close of business each day and subject to
periodic review.
3.2.5 Foreign Exchange Interventions
In furtherance to the Revised Guidelines for the Operation of the
Nigerian Inter-bank Foreign Exchange Market issued on June 15,
2016 and other circulars, manuals and policies; the CBN shall sustain
efforts at promoting transparency, efficiency, and liquidity in the
market. Thus, the Bank shall sustain its surveillance of the foreign
exchange market and participate through intervention, by buying
33
and/or selling foreign exchange in approved foreign currencies as
and when necessary.
3.2.6 Foreign Exchange Interventions in Renminbi
With reference to the “Regulation for the Transaction of Renminbi”
released on June 7, 2018 and the renewal of the Bilateral Swap
Currency Agreement (BSCA) with the Peoples Bank of China
(PBoC), the CBN shall sustain the conduct of bi-weekly auctions for
the sales of Renminbi on trade-backed transactions to authorized
dealers. Authorized dealers in the CBN bi-weekly auctions shall
comply with the following:
(i) All Authorised Dealers shall open Renminbi accounts with a
correspondent bank and advise accounts details to the
CBN
(ii) Importers intending to import from China shall obtain a

34
proforma invoice denominated in Renminbi
(iii) FX purchased from the Renminbi auctions are strictly for
payment to the beneficiary resident in the People’s
Republic of China
(iv) Authorised dealers are not allowed to open domiciliary
accounts denominated in Renminbi
(v) Authorised dealers for the operationalization of Renminbi
sales are strictly commercial and merchant banks.
3.2.7 Over-the-Counter Futures Trade Transactions – N1.0

Billion Pledge by ODCs
The revised Guidelines for the operationalization of the Nigeria
foreign exchange market released on June 15, 2016 which
introduced the Naira Settled Over the Counter (OTC) futures shall
remain in force during the period. Thus, to enhance efficiency in
35
trade and post-trade activities and build confidence in the financial
markets, all participating banks are mandated to pledge collateral
of N1.0 billion worth of Government/CBN securities for OTC
settlement as provided in Circular FMD/DIR/CIR/GEN/09/003 dated
May 31, 2018.
3.2.8 Discount Window Operations
The discount window at the CBN shall be available for authorised
dealers to access within the period. The window and the instruments
available shall be operated in line with the circular
FMD/DIR/PUB/GUI/01/001 dated April 12, 2021 titled ‘Guidelines for
the Conduct of Repurchase Transactions Under CBN Standing
Facilities’.
3.2.8.1 Standing Facilities
(i) Standing Lending Facility
36
The Standing Lending Facility (SLF) shall be open to Deposit Money
Banks (DMBs) and other eligible financial institutions that have
executed the Nigerian Master Repurchase Agreement (NMRA) with
the CBN. Eligible counterparties with temporary liquidity shortfalls
can access the CBN window for the overnight facility to bridge the
gap. The facility is collateralised with the applicable interest rate as
may be prescribed by the Monetary Policy Committee (MPC).
(ii) Standing Deposit Facility
The Standing Deposit Facility (SDF) shall be open to authorised
dealers with excess liquidity at the close of interbank operations. In
line with Circular FMD/DIR/CON/OGC/12/2019 titled ‘Guidelines on
Accessing the CBN Standing Deposit Facility’, issued on July 10,
2019, the remunerable daily placements by banks at the SDF shall
not exceed N2.00 billion (or as may be reviewed by the Bank) and
37
attract interest at the rate prescribed by the MPC from time to time.
Thus, any amount in excess of N2.00 billion shall not be remunerated.
(iii) Intra-day Liquidity Facility
The Intraday Liquidity Facility (ILF) shall enable Authorised Dealers to
access liquidity at the CBN window and repay within the same
business day at no cost. This collateralised facility enables the
Authorised Dealers to meet intra-day liquidity shortfalls. Failure to
repay within the day shall automatically convert ILF to SLF at a
punitive interest rate.
3.2.8.2 Non-Interest Financial Instruments
In line with efforts at deepening the non-interest financial markets
and facilitating liquidity management, the following instruments
and any other designated instruments as may be prescribed by the
Bank shall remain accessible by the Non-interest Financial

38
Institutions (NIFIs).
(i) CBN Safe Custody Account
The CBN Safe-Custody Account (CSCA) is an instrument based on
a contract of safe custody of funds between a depositing financial
institution with surplus funds and the CBN, with the CBN serving as
the custodian. The tenors for the placement shall continue to be
overnight, three-day, seven-day and any other tenor as may be
prescribed by the Bank, subject to roll-over on maturity for the same
term, either by the participating institution or the CBN.
(ii) CBN Non-Interest Note
The CBN Non-Interest Note (CNIN) is a financial paper issued by the
CBN, evidencing an interest–free loan instrument between an
authorised NIFI (lender) and the CBN (borrower), which entitles the
institution to raise a corresponding interest-free loan from the CBN

39
at a later date.
(iii) CBN Non-Interest Asset-Backed Securities
CBN Non-Interest Asset-Backed Securities (CNI-ABS) are instruments
involving the securitization of CBN’s holdings in International Islamic
Liquidity Management (IILM) securities and/or Sukuk issued by a
multilateral organization of which Nigeria is a member. The
underlying assets shall be short to medium term, to avoid tenor
mismatches, and must be tradeable in the secondary market.
(iv) Funding for Liquidity Facility
Funding for Liquidity Facility (FfLF) is a liquidity facility provided by
the CBN on an overnight basis only and to be terminated on the
next business day. Authorised NIFIs are to provide eligible securities
to the CBN, as collateral for the facility. The facility is subject to
administrative charges as may be approved by the Bank. The FfLF

40
shall continue to enable the CBN to play its role as lender of last
resort to the NIFIs during the 2022/2023 fiscal years.
(v) Intra-day Facility
Intra-day Facility (IDF) is an instrument that enables the NIFIs to meet
temporary liquidity shortages during the business day. Repayment
of the funds borrowed shall take place before the end of the
business day failing which leads to an automatic conversion of the
facility (IDF) to a Funding for Liquidity Facility (FfLF), and subject to a
penal rate as may be prescribed by the Bank from time to time. The
IDF shall be provided against eligible securities including the CSCA,
CNIN, CBN-ABS, Sukuk instruments with liquidity status and any other
collateral designated by the CBN that does not contravene the
Guidelines for NIFIs operations.
41
3.2.8.3 Special Bills
These are discretionary instruments that shall be used by the Bank
to deepen the financial market for liquidity management purposes.
(i) CBN Special Bills
To sustain efforts at effectively managing banking system liquidity,
the CBN shall continue to utilise available tools at its disposal.
Consequently, CBN special bills shall continue to be used for
financial institutions. Thus, all affected financial institutions are
required to adhere to the provisions of the circular
BSD/DIR/GEN/LAB/131086 dated December 1, 2020.
The CBN Special Bills shall be issued at the discretion of the Bank and
applicable to conventional banks at the CBN window. Features of
the instrument include:
42
(a) Tenors of 35, 63, 91, 126, 154 and 182 days, and subject to
review by the Bank from time to time;
(b) Tradability amongst banks, retail and institutional investors;
(c) Determination of the applicable yield at issuance by the
CBN;
(d) Ineligibility for repurchase agreement and rediscountability
at the CBN window; and
(e) Qualification as a liquid asset in the computation of liquidity
ratio for DMBs.
(ii) Central Bank of Nigeria Non-Interest Special Bills
The CBN Non-Interest Special Bills (CBN-NISB) shall be issued by the
Bank to any non-interest bank (NIB) as and when deemed
appropriate, evidencing an interest-free loan taken by the Bank
from the NIB. After maturity, the NIB would be entitled to
subsequently borrow ten (10) per cent of the value of the matured
43
Bill from the Bank within 30 days, for a period equivalent to one-third
(1/3) of the tenor of the initial loan taken by the CBN. Other features
of the CBN-NISB include:
(a) Issuance and redemption at par;
(b) Transferability at par amongst financial institutions specified
by the Bank;
(c) Eligibility for CBN discount window operations; and
(d) Qualification as a liquid asset in the computation of liquidity
ratio.
3.2.9 Federal Government of Nigeria Instruments
The FGN, through the Debt Management Office (DMO), and in
partnership with relevant stakeholders shall continue to determine
the issuance, features and frequency of its instruments in the market.
These instruments shall comprise Nigerian Treasury Bills (NTBs), FGN
Bonds, Sukuk, Promissory Notes, Savings Bonds, Green Bonds and

44
any other securities as may be determined by the fiscal authority.
The issuance of these instruments supports the FGN budget funding
needs, ensures the orderly development of public debt markets and
deepens the financial markets.
3.2.10 Interest Rate Policy
Interest rates in the 2022/2023 fiscal years shall continue to be
market-driven. The CBN shall continue to influence interest rates
indirectly, through the adjustment of its anchor rate, the MPR.
Accordingly, interest rates used by banks in the 2022/2023 fiscal
years shall comply with the following guidelines:
a. Banks shall continue to pay negotiated interest rates on
current account deposits at the instance of the
customer.
b. Banks shall continue to pay negotiated interest rates on
savings account deposits as provided in Guide to

45
Charges by Banks, Other Financial and Non-Bank
Financial Institutions or any other policy, circular or
guideline that may be issued by the Bank from time to
time.
c. Where special-purpose deposits (such as deposits held as
collateral or other similar deposits) are held, banks shall
pay interest at a rate negotiated with the customer,
subject to a minimum of 30.0 per cent of MPR per annum
for naira denominated deposits. A special purpose
deposit, as used in these Guidelines, is a deposit made
by, on behalf of, or transferred from the customer’s
account, which is not accessible to the customer, for
more than seven (7) days.
d. The applicable interest rate on foreign currency
denominated deposits held as collateral shall be
46
negotiated subject to a minimum of 0.18 per cent per
annum.
e. The reducing balance method shall be employed for
calculating interest charged on loans repayable in
instalments. The use of any other method for calculating
interest on loans payable in agreed instalments, such as
the discount method or the simple interest straight-line
method that would result in the payment of higher
effective rates of interest than the contracted rate is not
allowed.
f. A statement of account shall be rendered promptly, to
each account holder, minimally, on a monthly basis free
of charge and shall include:
i. Rates of interest on over drawn accounts, the amount
and the period; and
47
ii. Details of operation of the account during the month.
g. Interest on savings deposit shall be accrued on daily
basis and credited to the customer’s account at the end
of each month.
h. The balance on a personal savings account on which
interest is payable is not subject to any threshold.
i. Each bank shall continue to ensure the correctness of its
charges and interest payable on deposit accounts.
j. Where the bank discovers a non-payment or under-
payment of interest on deposits, other entitlements,
excessive interest and/or bank charges, the bank shall
refund the charges and/or excessive interest to the
customer within two weeks of the discovery/customer
complaint, with simple interest at the bank’s prevailing
maximum lending rate from the date of such non-
48
payment, underpayment and/or excessive interest up to
the date of refund, along with a letter of apology to the
customer. Where necessary, the customer’s account
should be reconstructed. Any bank that fails to comply
with this provision shall, in addition to the refund to the
customer, be liable to a penalty as may be prescribed
by the CBN.
k. Where the bank discovers a non-payment or
underpayment of interest in foreign currency
denominated accounts, other entitlements, excessive
interest and/or bank charges, the bank shall refund the
charges and/or excessive interest to the customer within
two weeks of discovery/customer complaint, with simple
interest at the bank’s maximum lending rate for foreign
currency denominated loans, along with a letter of
49
apology to the customer. Any bank that fails to comply
with this provision shall, in addition to the refund to the
customer, be liable to a penalty as may be prescribed
by the CBN.
Banks shall, in accordance with the provisions of BOFIA
2020 and amendments to Monetary Policy Circular No.
30 of 1996, continue to display daily at their offices,
current lending and deposit rates, as well as publish such
applicable rates daily on their websites and weekly in
national newspapers as contained in the Circulars
BSD/DIR/GEN/CIR/02/019 dated January 29, 2009 and
BSD/DIR/GEN/CIR/01/023 dated October 14, 2009.
3.2.11 Determination of Banks’ Cost of Funds

In the 2022/2023 fiscal years, banks shall continue to employ the
weighted average cost of funds methodology in the computation
50
of their cost of funds. The applicable cost items shall include interest
cost on the different types of deposit liabilities, borrowings from the
inter-bank funds market, payments in respect of deposit insurance
premium and costs due to reserve requirements. It should be noted
that overhead costs are excluded from this computation.
3.2.12 Framework for the Implementation of Risk-Based Interest

Pricing Model
Banks are expected to seek profitability by driving down costs and
charging competitive rates instead of charging excessive rates of
interest. Therefore, banks shall develop and implement a Risk-Based
Pricing Model in line with the provisions of CBN circular
BSD/DIR/GEN/CIR/04/015 on “The Need for Banks to Develop and
Implement a Risk-Based Pricing Model” issued on April 30, 2011. To
ensure that the MPR is an effective tool for driving lending rates,
51
banks are expected to disclose their prime and maximum lending
rates as a fixed spread over the MPR.
3.2.13 Opening of New Accounts
In line with the CBN’s commitment to enhancing financial inclusion,
the simplified Know-Your-Customer (KYC) measures shall remain in
force. This is aimed at enabling more individuals, especially low-
income groups, to access and use regulated financial services,
increase the reach and the effectiveness of anti-money
laundering/countering the financing of terrorism (AML/CFT)
regimes.
Accordingly, banks shall allow zero balances for opening new bank
accounts and simplify their account opening processes, while
52
adhering to KYC requirements. Banks are also encouraged to
develop new products that would provide greater access to credit.
3.2.14 Ways and Means Advances
Ways and Means Advances shall continue to be available to the
Federal Government, to finance deficits in its budgetary
operations to a maximum of 5.0 per cent of the previous year's
actual collected revenue. Such advances shall be liquidated as
soon as possible and shall in any event be repayable at the end
of the year in which it was granted.
Consistent with the banking arrangement of Treasury Single
Account (TSA), Ways and Means Advances would be
determined after recognizing the sub- accounts of the various
MDAs, which are linked to the Consolidated Revenue Fund (CRF)
53
to arrive at the FGN consolidated cash position.
3.2.15 Treasury Single Account
The Treasury Single Account (TSA) forms part of the government's
public financial management reform programme, through which
all Federal Government of Nigeria (FGN) accounts are harmonized
into a single account and linked to the Consolidated Revenue Fund
(CRF). The Bank will continue to collaborate with the Office of the
Accountant General of the Federation (OAGF) to ensure
improvement in the scheme’s process. To improve the operation of
the TSA, the Central Bank of Nigeria Internet Banking (CIB) was
developed for the use of external customers. Furthermore, the Bank
adopted an Aggregator Model through routing of transaction
54
details to the Transaction Query System (TQS), as part of its efforts to
improve the efficiency of TSA collections and allow participation of
multiple Payment Solution Service Providers (PSSPs) in the e-
Collection segment of the scheme. The initiative allows eligible
licenced PSSPs to transmit collection through the Nigerian-Interbank
Settlement System (NIBSS) for settlement at CBN, thus promoting
competition and efficient service delivery, which would ultimately
reduce e-Collection charges.
The CBN would continue to develop effective models for e-
Payment and the e- Collection segments under the TSA scheme.
The Bank envisages interfacing directly with the Government
Integrated Financial Market Information System (GIFMIS) Platform as
well as making the TSA payments instant within the fiscal years of
2022/2023. Similarly, the Bank shall continue to work towards
enabling the use of eNaira Wallet/Channels by payers to pay into
55
Government Accounts at the CBN and allow MDAs to initiate
vendor/beneficiary payments from their respective eNaira Wallet.
3.3 Supervisory Measures
3.3.1 Guidelines on Regulatory Capital
Deposit Money Banks shall be required to comply with new
Guidelines on Regulatory Capital and Supervisory Review Process of
Internal Capital Adequacy Assessment Process (ICAAP) as
contained in the circular BSD/DIR/PUB/LAB/14/063. This circular
revised the existing Basel II guidelines on Regulatory Capital and
introduced some Basel III standards with effect from November
2021.
The review aims to:
(i) strengthen the regulation and supervision of Nigerian banks,
56
(ii) promote the implementation of better risk management
practices and governance arrangements within the
Nigerian banks,
(iii) enhance the implementation of Basel II and III standards in
Nigeria,
(iv) reduce the risk of a build-up of excessive leverage in
individual banks and the banking system;
(v) provide a safeguard against excessive concentration;
(vi) strengthen the resilience of Nigerian banks by increasing
the minimum requirement for high quality capital and
preservation of capital that can absorb losses on a going
concern basis; and
(vii) to promote the build-up of capital and liquidity buffers by
the Nigerian banks.
The Guidelines cover the following standards:

57
a) Liquidity Coverage Ratio (LCR)
b) Liquidity Monitoring Tools
c) Liquidity Risk Management and Internal Liquidity Adequacy
Assessment Process (ILAAP)
d) Leverage Ratio Requirements (LeR)
e) Large Exposures
f) Regulatory Capital definition
g) Supervisory Review and Evaluation Process of Internal Capital
Adequacy Assessment Process (ICAAP)
3.3.2 Basel Core Principles’ Self-Assessment and Financial

Sector Assessment Programme
To determine its level of compliance with the Basel Core Principles
for Effective Banking Supervision (BCPs), the CBN shall carry out a
self-assessment of compliance with the BCPs preparatory to the
Financial Sector Assessment Programme (FSAP).
58
3.3.3 Publication of Defaulters of Foreign Exchange Policy on

PTA/BTA
In line with circular BSD/DIR/PUB/LAB/14/059 dated August 30, 2021
on “Publication of Names of Defaulters of the CBN Policy on Sale of
Forex For PTA/BTA”, all banks shall publish the names and BVN of
customers who present fake travel documents or cancel their flight
tickets and fail to return the PTA/BTA they purchased within two
weeks as stipulated in the customer’s declaration form.
3.3.4 Sale of Foreign Exchange to Retail Customers at Bank

Branches
In line with circular BSD/DIR/PUB/LAB/14/052 dated July 28, 2021 on
“Teller Points at Bank Branches for the Sale of FX to Retail
Customers”, all banks shall set up teller points at designated
59
branches across the country to fulfil legitimate FX requests for
PTA/BTA, tuition fees, medical payments, SME Transactions, etc.
3.3.5 Policy Stance on Crypto-Currency Transactions
In line with circulars FPR/DIR/GEN/CIR/06/010 dated January 12,
2017 and BSD/DIR/PUB/LAB/014/001 dated February 5, 2021, all
regulated institutions are prohibited from dealing in
cryptocurrencies or facilitating payments for cryptocurrency
exchanges.
3.3.6 Stimulating Long Term Lending
In line with the circular, BSD/DIR/GEN/LAB/13/015 dated August 26,
2020 on “Stimulating Long Term Lending”, the Bank approves a risk-
weight of 50 per cent for all exposures to specified sectors, namely,
agriculture, real estate, construction, transportation and storage
60
with a maturity of 3 – 5 years. This provision, however, is subject to
review by the Bank as the need arises.
3.3.7 Issuance and Treatment of Bankers Acceptances and

Commercial Papers
To standardise the treatment of Bankers’ Acceptances and
Commercial Papers by Banks and Discount Houses in Nigeria, all
banks shall continue to comply with the “Guidelines on The Issuance
and Treatment of Bankers Acceptances and Commercial Papers”
dated September 11, 2019.
3.3.8 Credit Risk Management
To enhance credit risk management in the banking system, banks
are mandated to adhere to various circulars, guidelines and other
enactments.
61
3.3.8.1 Credit Risk Management System
Under the existing Credit Risk Management System (CRMS) banks
shall continue to comply with the provisions of the CRMS as
stipulated in FPR/DIR/GEN/06/012 dated February 27, 2017 and
FPR/DIR/GEN/07/007 dated September 10, 2018. The circulars
mandate banks to report credit facilities and make references to
the CRMS before disbursement of credit.
3.3.8.2 Credit Bureaux
During the 2022/2023 fiscal years, the operations of private credit
bureaux shall be guided by the provisions of the Credit Reporting
Act, 2017 and the National Credit Reporting System Regulation,
2019.
Thus, all banks and other financial institutions shall continue
to:
62
a. Have data exchange agreements with at least two (2)
licensed credit bureaux;
b. Obtain credit reports from at least two (2) licenced credit
bureaux in addition to the CBN CRMS before granting any
new credit facility, or when reviewing, renewing or
restructuring an existing facility;
c. Obtain credit reports for quarterly credit reviews on all
existing facilities from at least two (2) licensed credit bureaux;
d. Upload loan data of all its existing credit customers to the
credit bureaux with which it has executed data exchange
agreements;
e. Update any change in the data submitted to the credit
bureaux pursuant to the relevant provision of the Act, at least
on a monthly basis or more frequently, or in accordance with
a schedule provided by the credit bureaux.
63
3.3.8.3 Credit Scoring Regime
To improve the credit space and unlock access to consumer and
retail loans, the Bank shall require all identified data controllers to
provide data to a central depository.
3.3.8.4 New Offer Letter Clause for Credit Facilities
To enhance credit risk management in the banking system, banks
are mandated to adhere to the provisions of the circular
BSD/DIR/GEN/LAB/12/054 dated August 26, 2019 on “New Offer
Letter Clause for Credit Facilities”. This provides that the terms and
conditions in offer letters and loan agreements be signed by
prospective obligors, which shall include an undertaking by the
obligor permitting the bank to have access to and utilise the
deposits of the obligor in the banking industry when in default.
64
3.3.9 Publication of Annual Financial Statements
In accordance with the provisions of BOFIA 2020, banks and other
financial institutions are required, subject to the written approval of
the CBN, to publish not later than three (3) months after the end of
each financial year, their audited financial statements, in a national
daily newspaper printed and circulated in Nigeria. To facilitate the
implementation of consolidated supervision, all banks and their
subsidiaries shall continue to adopt December 31, as their
accounting year end. The CBN shall continue to hold the Board
Chairman and Managing Director/Chief Executive Officer
(MD/CEO) of a defaulting bank directly responsible for any breach
and impose appropriate sanctions which may include the following:
65
(i) Barring the MD/CEO or his/her nominee from
participating in the Bankers’ Committee and disclosing
the reason for such suspension;
(ii) Suspension of the foreign exchange dealership licence
of the bank and its name sent to the Nigerian Stock
Exchange (in the case of a public quoted company);
and
(iii) Removal of the Chairman and MD/CEO from office if the
accounts remain unpublished for twelve (12) months
after the end of the bank’s financial year.
3.4 The Payments System
The Bank shall continue to enhance the credibility, reliability,
efficiency and safety of the national payments system through the
formulation and enforcement of guidelines and policies, roll out of

66
more payments initiatives, as well as collaboration with all relevant
stakeholders.
3.4.1 Payments System Vision
To achieve the mandate of creating a payments system that is
‘nationally utilised and internationally recognised’, the Bank would
latch on to the implementation of the Payments System Vision (PSV)
2025 within the 2022/2023 plan period.
This aims to engender safety and efficiency of the payments system;
deepen financial inclusion; improve the competitiveness of the
payment service providers and FinTech Startups and facilitate
economic activities.
3.4.2 Security of the Payments System
The Bank shall continue to ensure that all regulated entities in the
payments space conduct their operations in line with global
67
payment industry standards. These include Payment Application
Data Security Standard (PA DSS), Payment Card Industry PIN Entry
Device (PCI PED), Payment Card Industry Data Security Standard
(PCI DSS), Triple Data Encryption Standard (Triple DES), Europay,
MasterCard and Visa – EMV Standards, and as may be stipulated
from time to time. Card schemes and financial institutions shall
ensure that all cards produced and issued in Nigeria, are chip-
based.
The CBN shall continue to ensure that entities in the payments system
strictly comply with all existing policies and guidelines including the
following:
i. Circular on the Revised Standards on Nigeria Uniform
Bank Account Number (NUBAN) for Banks and Other
Financial Institutions
68
https://www.cbn.gov.ng/Out/2020/PSMD/REVISED%20ST
ANDARDS%20ON%20NIGERIA%20UNIFORM%20BANK%20
ACCOUNT%20NUMBER%20(NUBAN)%20FOR%20BANKS%2
0AND%20OTHER%20FINANCIAL%20INSTITUTIONS%20.pdf
ii. Guidelines on Operations of Electronic Payment
Channels in Nigeria
https://www.cbn.gov.ng/Out/2020/CCD/Reviewed%20
and%20Approved%20Guidelines%20on%20Operations%
20of%20Electronic%20Payment%20Channels%20in%20Ni
geria%202020.pdf
iii. New License Categorisation for the Nigerian Payments
System
https://www.cbn.gov.ng/Out/2020/CCD/Categorization
%20of%20PSPs.pdf
iv. Circular on Receipts of Diaspora Remittances: Additional
69
Guidelines
https://www.cbn.gov.ng/Out/2020/CCD/RECEIPT%20OF
%20DIASPORA%20REMITTANCES%20ADDITIONAL%20OPE
RATIONAL%20GUIDELINES.pdf
v. Circular on Receipts of Diaspora Remittances: Additional
Guidelines 2
https://www.cbn.gov.ng/Out/2020/CCD/RECEIPT%20OF
%20DIASPORA%20REMITTANCES%20ADDITIONAL%20OPE
RATIONAL%20GUIDELINES%202.pdf
vi. Framework for Regulatory Sandbox Operations
https://www.cbn.gov.ng/Out/2021/CCD/FRAMEWORK%
20FOR%20REGULATORY%20SANDBOX%20OPERATIONS.p
df
vii. Framework for Quick Response (QR) Code Payments in
70
Nigeria
https://www.cbn.gov.ng/Out/2021/CCD/FRAMEWORK%
20FOR%20QUICK%20RESPONSE%20(QR)%20CODE%20PA
YMENTS%20IN%20NIGERIA.pdf
viii. Circular on Issuance of Regulatory Framework for Open
Banking in Nigeria
https://www.cbn.gov.ng/Out/2021/PSMD/Circular%20o
n%20the%20Regulatory%20Framework%20on%20Open%
20Banking%20in%20Nigeria.pdf
ix. Circular on Issuance of the Regulatory Framework for
Non-Bank Acquiring in Nigeria
https://www.cbn.gov.ng/Out/2021/CCD/Regulatory%20
Framewor k%20for%20Non-
Bank%20Acquiring%20in%20Nigeria%202021.pdf
x. Supervisory Framework for Payment Service Banks
71
https://www.cbn.gov.ng/Out/2021/CCD/Supervisory%20
Framework%20for%20PSBs.pdf
xi. Regulatory Framework for Mobile Money Services in
Nigeria
https://www.cbn.gov.ng/Out/2021/CCD/Framework%20
and%20Guidelines%20on%20Mobile%20Money%20Servic
es%20in%20Nigeria%20-%20July%202021.pdf
xii. Circular on Issuance of the Guidelines for Licensing and
Regulation of Payments Service Holding Companies in
Nigeria
https://www.cbn.gov.ng/Out/2021/CCD/CIRCULAR%20
AND%20GUIDELINES%20FOR%20LICENSING%20AND%20R
EGULATION%20OF%20PAYMENTS%20SERVICE%20HOLDIN
G%20COMPANIES%20IN%20NIGERIA.pdf
xiii. Revised Regulatory Framework for Bank Verification
72
Number (BVN) Operations and Watch-List for the
Nigerian Banking Industry
https://www.cbn.gov.ng/Out/2021/CCD/REVISED%20RE
GULATORY%20FRAMEWORK%20FOR%20BANK%20VERIFIC
ATION%20NUMBER%20(BVN)%20OPERATIONS%20AND%2
0WATCH-
LIST%20FOR%20THE%20NIGERIAN%20BANKING%20INDUST
RY%20121021%20FINAL.pdf
3.4.3 Operation of the Bank Verification Number
The Bank shall continue to implement the requirements of the
Bank Verification Number (BVN) to provide unique identifiers to
customers in the financial system and improve KYC
documentation. This is as contained in the “Regulatory
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Framework for BVN Operations and Watch-List for the Nigerian
Financial System”, or as may be amended from time to time.
3.4.4 Cash-less Policy
In the 2022/2023 fiscal years, the Bank shall continue to implement
the cash-less policy aimed at reducing the amount of cash
circulating in the economy and encouraging the use of electronic
means of payment for goods, services and transfers. This initiative
shall be extended beyond the pilot locations of Lagos, Ogun, Kano,
Abia, Anambra, Rivers States and the Federal Capital Territory.
Accordingly, the following charges shall apply on
deposit/withdrawal above the prescribed limits or as may be
reviewed from time to time:
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Account Withdrawal/ Processing Fees Processing
Type Deposit Limits for Withdrawals Fees for Deposit
Individual Above N500,000 3% 2%
Above
Corporate N3,000,000 5% 3%
3.4.5 Shared Agency Network Expansion Facility
The Shared Agency Network Expansion Facility (SANEF), established
to enhance the provision of financial services access points in
under-served and unserved locations as well as drive financial
inclusion through agent banking, shall continue in the 2022/2023
fiscal years. Banks, mobile money operators and super-agents shall
continue to render returns in the prescribed formats and frequency
to the CBN.
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3.4.6 Fees and Charges
The Bank shall continue to ensure that entities involved in the
payments system adhere strictly to the charges and fees as
prescribed in the Guidelines on Operations of Electronic Channels
in Nigeria, as well as the Guide to Charges by Banks, Other Financial
and Non-Bank Financial Institutions.
3.4.7 Sanctions on Erring Banks/E-payment Service Providers

for Infractions of Payments System Rules and Regulations
The Bank shall enforce applicable sanctions to erring banks and
payment service providers for infringements of extant rules and
regulations on all forms of electronic payments, including
withdrawal of licences and letters of no objection.
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3.4.8 Cheque Processing
An enabling environment for efficient processing of cheques and
other paper-based payment instruments shall be sustained.
3.4.8.1 Cheque Clearing
The Bank shall continue to improve the clearing infrastructure to
increase the efficiency of the system. The cheque truncation system
shall continue to be used for the exchange of images of the
instruments and Magnetic Ink Character Recognition (MICR) data.
The cheque clearing cycle and the maximum cap remain at T+1
and N10.00 million, respectively.
3.4.8.2 Cheque Standards and Cheque Printers Accreditation

Scheme
The revised Nigeria Cheque Standards (NCS) and Nigeria Cheque
Printers Accreditation Scheme (NICPAS) shall remain operational

77
during the period to improve the safety and efficiency of the
clearing system. Notable changes in the revised Standards include
the introduction of Quick Response (QR) Code for faster verification
of cheque details, expiry date of printed cheque booklet and a
clear zone for cheque analysis.
In line with the revised guideline, the Bank shall continue to conduct
annual accreditation of the Nigeria cheque printers and cheque
personalizers.
3.4.8.3 Authorized Signatory Verification Portal
The Authorized Signatory Verification (ASV) portal shall continue to
be used as a secure electronic-based shared service solution for
authorized signatory management in the banking system. The Bank
shall adopt the ASV for verification of Deposit Money Bank’s
mandate.
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3.4.8.4 Real-Time Gross Settlement System
The Bank shall maintain and upgrade the Real-Time Gross
Settlement (RTGS) System for the consummation of inter-bank
transactions and time-critical payments. The RTGS system shall
operate between the hours of 8.00 am and 6.30 pm on weekdays.
However, plans are underway to operate the RTGS system round
the clock (24/7), to accommodate users’ needs.
3.4.8.5 Settlement and Non-Settlement Banks
The categorisation of banks into settlement and non-settlement
banks for the purpose of clearing and settlement shall remain in
force during the period. Settlement banks participate directly in the
clearinghouse and receive their net clearing positions in their
settlement accounts with the CBN. The non-settlement banks
79
receive their net clearing positions through the settlement accounts
of their settlement banks.
Any bank applying to be a settlement bank shall be required to
meet the following conditions:
i. Provide clearing collateral of N15.00 billion, subject to periodic
review;
ii. Ability to offer agency facilities to other banks and to clear
and settle on their behalf; and
iii. Adequate branch network, in all the CBN locations.
However, the Bank shall continue to review the existing
arrangement to enhance the efficiency of the clearing system.
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3.4.8.6 Shared Services Arrangement between Nigerian Banks

and Related Entities
During this period, the “Guidelines on Shared Services
Arrangements for Banks and Other Financial Institutions in Nigeria”
shall take effect from June 2022. The Guideline aims at addressing
the uneven management of shared services with the attendant
concerns on governance, financial and tax management
practices by outlining general principles, approved services,
governance, transfer pricing, regulatory reporting and compliance.
3.5 Other Policy Measures
3.5.1 Development Finance Policies
To address the financing gaps in the real sector, the CBN shall
continue to proactively evolve policy measures to stimulate the
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flow of low-cost financing to targeted sectors of the economy
during the period.
To enhance uniformity in the implementation of development
finance initiatives, the interest rate of all CBN intervention
programmes shall be sustained at an all-inclusive rate of 5.0 per
cent per annum up to February 2023. However, facilities under the
Agricultural Credit Guarantee Scheme Fund (ACGSF) shall continue
to be granted at the prevailing market rate. The CBN interventions
have non-interest banking component.
3.5.1.1 Financing the Development of Agricultural Value Chain

To consolidate the gains recorded in its various interventions, the
Bank shall collaborate with key stakeholders to develop
programmes and schemes to strengthen the agricultural value
chain by unlocking the flow of capital from financial institutions. The
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initiatives of the Bank targeted at the development of the
agricultural value chain include:
(i) Anchor Borrowers’ Programme
The CBN through the Anchor Borrowers’ Programme (ABP) shall
continue to finance smallholder farmers and create economic
linkages between them and agro-processors/anchors. This would
entail the provision of low-cost financing, access to quality inputs
and training on best agricultural practices.
(ii) Accelerated Agricultural Development Scheme
In support of the FGN’s efforts at promoting agriculture as a vehicle
for food security, youth employment and economic growth, the
CBN shall collaborate with state governments and the FCT on the
agricultural value chain. This would be in commodities where the
states have a comparative advantage.

83
(iii) Private Sector-led Accelerated Agriculture Development
Scheme
To increase primary agricultural production, the Private sector-led
Accelerated Agriculture Development Scheme (P-AADS) shall
promote the private-sector partnership to facilitate rapid land
clearing and development. Implementation of these interventions
and others shall be intensified to support food security, job creation
and economic diversification.
(iv) Commercial Agriculture Credit Scheme
The Commercial Agriculture Credit Scheme (CACS) shall continue
to finance large-scale agricultural projects with the objective of
fast-tracking the development of the agricultural value chain. The
Scheme focuses on selected commodities: rice, wheat, oil palm,
fish, sugar, cotton, dairy and maize with an aim to curtail Nigeria’s
84
import bill. Monitoring of projects financed under the Scheme will
be intensified, while financing of high-impact projects shall be
sustained during the period to boost agricultural value chain
development.
(v) Paddy Aggregation Scheme
The CBN, through the Paddy Aggregation Scheme (PAS), shall
continue to finance short-term working capital under the CACS, to
facilitate the purchase and aggregation of home-grown paddy by
integrated rice millers. This is to reduce the high cost of local rice,
thereby making the price of local rice affordable and competitive.
(vi) Maize Aggregation Scheme
The Maize Aggregation Scheme (MAS) is a short-term working
capital facility, under the Commercial Agriculture Credit Scheme,
to finance the purchase and aggregation of maize and improve

85
processing capacity across the country. The Scheme shall be
sustained during the period.
(vii) National Food Security Programme
The CBN shall continue to implement the National Food Security
Programme (NFSP) to ramp up food production and job creation
across the country with the participation of large-scale farms that
have numerous farmers as out-growers. The Programme shall
finance agro-enterprises to procure and mop-up grains, such as
soya, corn/maize, sorghum, and millet to support the FGN’s
Strategic Food Reserve initiative.
(viii) Presidential Fertilizer Initiative
The CBN shall continue to support the Presidential Fertilizer Initiative
(PFI) through the Nigerian Sovereign Investment Authority (NSIA), to
increase the production of Nitrogen, Phosphorus and Potassium

86
(NPK) fertilizer by local blending plants. The initiative is targeted at
enhancing domestic fertilizer availability and affordability, with a
view to improving farmers’ productivity and job creation.
(ix) Agricultural Credit Guarantee Scheme
The CBN shall continue to implement the Agricultural Credit
Guarantee Scheme (ACGS) to stimulate finance to the agricultural
sector by providing up to 75.0 per cent guarantee to banks that
grant loans for agricultural purposes, in the event of default.
Complementary to the scheme, the Bank shall continue the
operation of the Interest Drawback Programme (IDP) under which
ACGS loan beneficiaries that repay their loans as and when due,
are eligible to be paid interest rebate, at a rate determined by the
CBN at the beginning of each financial year.
87
3.5.1.2 Financing the Development of the Real Sector
The CBN shall sustain its collaboration with relevant stakeholders in
stimulating credit to the real sector through its interventions.
(i) 100 for 100 Policy on Production and Productivity
The CBN shall implement the 100 for 100 Policy on Production and
Productivity (100 for 100 PPP) to reduce over-reliance on imports of
food and industrial raw materials, by transforming the domestic
productive base. The initiative shall facilitate the flow of finance and
investments to enterprises with the potential to catalyse sustainable
economic growth trajectory, accelerate structural transformation,
promote diversification, and improve productivity.
On a quarterly basis, the CBN shall select 100 private sector
companies with projects that have the potential to significantly
88
increase domestic production and productivity. This would help
reduce imports, increase non-oil exports and improve foreign
exchange generating capacity in the Nigerian economy.
(ii) COVID-19 Intervention for Manufacturing Sector
The CBN shall continue to implement the COVID-19 Intervention for
Manufacturing Sector (CIMS). The scheme aims to strengthen the
resilience of the manufacturing sector by improving access to
affordable credit to domestic manufacturing enterprises across
priority sectors of the economy.
(iii) Real Sector Support Facility through Differentiated Cash
Reserve Requirement and Corporate Bonds
The CBN shall continue to work with banks through the Real Sector
Support Facility-Differentiated Cash Reserve Requirement (RSSF-
DCRR) and Corporate Bonds (CBs), to lend out of their cash reserve
89
requirement with the CBN, to greenfield and brownfield projects in
agriculture, manufacturing and other sectors considered to be
employment-elastic and growth-stimulating.
(iv) Race to US$200 Billion in FX Programme
The CBN, in collaboration with the Bankers’ Committee, shall
implement the Race to US$200 Billion in FX Repatriation (RT200 FX
Programme). The programme targets diversification of the
economy through non-oil export and repatriation of the proceeds
to the tune of US$200 billion over the next 3 – 5 years. This shall be
implemented through five vertical initiatives, namely:
a. Value-Adding Export Facility;
b. Non-oil Commodities Expansion Facility;
c. Non-oil FX Rebate Scheme;
d. Dedicated Non-oil Export terminal; and
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e. Biannual Non-oil Export Summit.
(v) Non-Oil Export Stimulation Facility
Through the Non-Oil Export Stimulation Facility (NESF), the CBN shall
continue to sustain the diversification of the revenue base of the
economy and expedite the growth and development of the non-
oil export sub-sector.
3.5.1.3. Financing the Development of Micro, Small and Medium

Enterprises
The Bank shall continue to encourage and collaborate with other
stakeholders to evolve initiatives that would facilitate the
development of micro, small and medium enterprises (MSMEs)
during the period. This is in recognition of the importance of MSMEs
to the development and transformation of the economy.
91
The initiatives targeted at the development of MSMEs include:
(i) Tertiary Institutions Entrepreneurship Scheme
The CBN shall sustain the implementation of the Tertiary Institutions
Entrepreneurship Scheme (TIES) to create a paradigm shift among
graduates and undergraduates from the pursuit of white-collar jobs
to a culture of entrepreneurship for economic development and
job creation. In partnership with Nigerian Polytechnics and
Universities, the Scheme shall facilitate innovative financing model
to achieve the objectives of the scheme.
(ii) Agri-Business/Small and Medium Enterprises Investment
Scheme
In collaboration with the Bankers’ Committee, the CBN shall
continue to expand affordable credit to households and small
businesses engaged in agribusinesses and other eligible activities

92
under the Scheme. This is to support the FGN’s efforts and policy
measures for the promotion of agricultural businesses and small
and medium enterprises, as vehicles for employment generation
and sustainable economic development.
(iii) Creative Industry Financing Initiative
The Bank shall intensify the implementation of the Creative Industry
Financing Initiative (CIFI) to improve access to long-term and low-
interest finance by entrepreneurs and investors in the Nigerian
creative industry and information technology sub-sector. Activities
eligible for financing include fashion, information technology,
software development, movie and music production and
distribution.
93
(iv) Targeted Credit Facility
Through NIRSAL Microfinance Bank Limited, the CBN shall continue
to lend to households and MSMEs to cushion the adverse effects of
COVID-19 pandemic, particularly those whose economic activities
have been significantly disrupted.
(v) National Collateral Registry
The CBN shall continue to support the activities of the National
Collateral Registry (NCR) to enhance access to credit through the
diversification of eligible assets for collateral purposes. The NCR shall
facilitate the use of movable assets as collateral for credit to
deepen financial inclusion. The Registry provides a public web-
based system that allows lenders to determine any prior security
interest, as well as establish security interest in movable assets
pledged as collateral.
94
3.5.1.4 Healthcare Sector Financing
stakeholders to evolve initiatives that facilitate the development of
the health sector during the period.
(i) Healthcare Sector Intervention Facility
Through the Healthcare Sector Intervention Facility (HSIF), the CBN
shall strengthen the healthcare sector’s capacity to meet the
increasing demand for healthcare products and services and
ameliorate the effect of the COVID-19 pandemic. The Facility shall
provide credit to indigenous pharmaceutical companies and other
healthcare value chain players to build and expand world-class
healthcare facilities and reduce medical tourism.
95
(ii) Healthcare Sector Research and Development Intervention
(Grant) Scheme
The Healthcare Sector Research and Development Intervention
Scheme (HSRDIS) shall continue to support research and
development in the local production of vaccines, drugs and herbal
medicines against the spread of COVID-19 and any other
communicable and non-communicable diseases. The Scheme
shall provide grants to bio-technological and pharmaceutical
companies, institutions, researchers, and research institutes to
achieve the set objectives.
3.5.1.5 Infrastructure Financing

stakeholders to evolve initiatives that facilitate infrastructural
financing during the period.
96
(i) Power and Airline Intervention Fund
Through the Power and Airline Intervention Fund (PAIF), CBN shall
continue to finance electric power projects and the aviation sector
of the Nigerian economy, with the objective of improving power
supply, generating employment, and enhancing the standard of
living of Nigerians.
(ii) Nigeria Electricity Market Stabilization Facility
The CBN, in conjunction with stakeholders, shall continue to
facilitate the financing of the electricity industry to enhance
economic development through the Nigeria Electricity Market
Stabilization Facility (NEMSF), in line with the CBN circular
FPR/DIR/GEN/CIR/01/004 dated March 4, 2015.
97
(iii) National Mass Metering Programme
The CBN shall facilitate the procurement and installation of
electricity meters across the country through the National Mass
Metering Programme (NMMP). This would bridge the metering gap
in the Nigeria Electricity Supply Industry (NESI), eliminate estimated
billing and improve Distribution Companies’ (DisCos) revenue
collection.
(iv) Solar Connection Facility
The Solar Connection Facility (SCF) would continue to stimulate
finance and investments in Nigeria’s solar photovoltaic value chain
and support the provision of solar home systems and mini-grids for
communities currently not connected to the National Grid.
98
(v) Intervention Facility for the National Gas Expansion
Programme
The Intervention Facility for National Gas Expansion Programme
(IFNGEP) shall continue to support the Bank’s effort to stimulate
investment in the gas value chain with the objective of making
compressed natural gas (CNG) the fuel of choice for transportation
and liquefied petroleum gas (LPG), the fuel of choice for domestic
cooking, captive power and small industrial complexes. Gas-based
industries will also be enabled to support large industries, such as
agriculture, industrial applications and textiles, among others.
(vi) Financial Inclusion Strategy
The Bank shall intensify the implementation of the revised National
Financial Inclusion Strategy (NFIS) in a bid to achieve 95.0 per cent
financial inclusion target by 2024. The objective is to reduce the
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adult financial exclusion rate in Nigeria to 5.0 per cent of the adult
population by 2024. Leveraging existing bank branches, agent
banking, mobile money agents and digital financial services, the
revised Strategy has five priority areas namely: female gender;
youth within the age bracket of 18 to 25 years; rural dwellers;
regional gaps; and MSMEs. Under this Strategy, the Bank shall also
sustain the implementation of the Access to Finance Framework for
Women, to improve efforts to accelerate the uptake of financial
services amongst women.
3.6 Orderly Development of the Banking System
3.6.1 Bank Credit Expansion
Banks shall meet the following criteria to be allowed to grant new
credit facilities in the 2022/2023 fiscal years:
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a. Minimum capital adequacy ratio
b. Specified liquidity ratio
c. Provisions of the Prudential Guidelines
d. Minimum shareholders’ funds
e. Specified cash reserve requirement
f. Sound corporate governance
3.6.2 Prudential Guidelines for Licensed Banks
The provisions of the Prudential Guidelines shall continue to apply in
the 2022/2023 fiscal years, subject to review based on
developments in the industry. The differences resulting from the
comparison of expected losses determined under International
Financial Reporting Standards (IFRS) with all losses determined
under the Prudential Guidelines shall continue to be adjusted under
101
the statement of changes in equity, through the non-distributable
regulatory reserve.
3.6.3 Capital Adequacy
The minimum ratio of total qualifying capital to total risk-weighted
assets shall remain at 10.0 per cent for regional and national
commercial banks, and 15.0 per cent for international commercial
banks in the 2022/2023 fiscal years. No less than 75.0 per cent of
banks’ capital shall comprise paid-up capital and reserves. Banks
shall also maintain a ratio of not more than one to ten (1:10)
between adjusted capital funds and total credit net of provisions.
Banks are also encouraged to maintain a higher level of capital
commensurate with their risk profile.
102
Banks and banking groups are required to comply with the
appropriate guidelines for the measurement and calculation of
capital requirements.
3.6.4 Responsibilities of Banks’ External Auditors to the

Supervisory Authorities
The requirement that banks and other financial institutions should
instruct their external auditors to forward two (2) copies of their audit
reports to the CBN, not later than three (3) months after the end of
banks’ financial year, shall remain in force in the 2022/2023 fiscal
years.
The external auditors of all banks and other financial institutions are
expected to comply with the provisions of Rule 9 [Application of
International Standard on Auditing (ISA) 701 – Communicating Key
Audit Matters in the Independent Auditor’s Report] of the Financial

103
Reporting Council of Nigeria for audit of financial statements for the
period ending on or after June 30, 2017.
The report on fraud and forgeries committed during the accounting
year under review shall also accompany the audited reports.
Moreover, each bank shall continue to communicate the
appointment, re-appointment, termination, and resignation of its
external auditors to the CBN, stating the reasons for such action.
Where a bank fails to comply with this requirement, the CBN reserves
the right to withhold the approval for publication of such accounts
and apply an appropriate sanction.
Banks are required to ensure that their external auditors are in
attendance at the presentation of Examination Reports by the
Supervisory Authorities to their Boards of Directors. The tenure of the
external auditors in a given bank shall be for a maximum period of
104
ten (10) years, after which the audit firm shall not be reappointed in
the bank until after a period of another ten (10) years.
Banks are required to submit to the CBN, on a quarterly basis,
progress reports on the implementation of the recommendations of
the External Auditors in Management letters. External auditors shall
also:
a. Issue a statement as to the existence, adequacy and
effectiveness or otherwise of the internal control system, in their
audit reports, in line with the provisions of Section 63 of the
Investment and Securities Act 2007; and
b. Devote a portion of their report to the review of the bank’s
implementation of the preceding year’s audit
recommendations.
105
3.6.5 Returns from Banks
All banks shall render, in a timely manner and in the prescribed
format, accurate reports of their activities for the daily, monthly,
quarterly and semi-annual returns. The returns shall be rendered
through the Financial Analysis (FiNA) System and any other medium,
as may be required. Daily returns shall be submitted by 10:00 am of
the next working day, while monthly, quarterly and semi-annual
returns shall be submitted on or before the 5th day of the
subsequent month. Where the 5th day is a weekend or a public
holiday, returns shall be submitted on the previous working day.
During the period, banks shall continue to render weekly returns on
deposit and lending rates to Banking Supervision Department. The
rates shall include all charges, commissions, and fees, annualised
106
and added to the base lending rates to arrive at the all-inclusive
rate.
3.6.6 Penalties for Default
The CBN shall continue to enforce the stipulated penalties for non-
compliance with regulatory guidelines, as well as the provisions of
the CBN Act 2007 and the BOFIA, 2020 in the 2022/2023 fiscal years.
Any financial institution that fails to comply with the extant
guidelines and other directives that may be issued by the CBN, shall
be sanctioned accordingly.
3.6.7 Transparency in Financial Transactions
Financial institutions shall continue to observe the following financial
transparency standards in the 2022/2023 fiscal years:
107
3.6.7.1 Know-Your-Customer
Banks and Other Financial Institutions shall continue to apply the
Know-Your Customer (KYC) principles and Customer Due Diligence
(CDD) as specified in the CBN (AML/CFT in Banks and Other
Financial Institutions in Nigeria) Regulations, 2013 (as amended).
Financial institutions are required to continue to observe the
restrictions and limits on levels I and II of the Tiered KYC accounts as
contained in the CBN circular FPR/DIR/CIR/GEN/06/002 of July 1,
2016 .
3.6.7.2 Compliance with Anti-Money Laundering

(AML)/Combating the Financing of Terrorism (CFT) Laws
and Regulations
Banks and other financial institutions shall continue to observe high
ethical standards and ensure compliance with the relevant laws
108
and regulations governing their operations. The CBN shall continue
to enforce the provisions of the Money Laundering (Prohibition) Act,
2011 (as amended), the CBN (AML/CFT in Banks and Other Financial
Institutions in Nigeria) Regulations, 2013 and other relevant
regulations. Banks and OFIs are required to strengthen their
governance systems and enhance the identification, monitoring
and reporting of money laundering and terrorism financing. All
institutions are also required to upscale their platforms for the
efficient and timely rendition of Suspicious Transactions Reports
(STRs) on ML/FT in line with CBN circular FPR/DIR/GEN/CIR/06/022
dated June 21, 2017 (https://www.cbn.gov.ng).
3.6.7.3 Co-operation with Law Enforcement Authorities
109
In compliance with Financial Action Task Force (FATF)
Recommendation 2, banks and other financial institutions are
required to cooperate with law enforcement authorities within the
limits of the rules governing confidentiality. Where financial
institutions have information that lead to a reasonable presumption
that funds lodged in an account or transactions being entered into
are derived from any of the predicate offences or criminal activity
or intention, they should observe the stipulated procedures for filing
suspicious transactions reports consistent with extant reporting
procedures. Any financial institution that contravenes these
requirements shall attract appropriate penalties as stipulated in the
CBN AML/CFT (Administrative Sanctions) Regulations, 2018 and
BOFIA 2020 and other relevant AML/CFT laws.
The Bank shall collaborate with relevant law enforcement agencies
in the course of determining the appointments of ‘fit and proper

110
persons’ as directors of CBN licensed financial institutions as well as
the suitability of promoters of financial institutions.
3.7 Risk-Based Supervision
The CBN shall continue to adopt the risk-based approach in the
supervision of institutions under its purview. The objective of the
approach is to provide an effective process to assess the safety and
soundness of banks and other financial institutions.
3.7.1 Consolidated Supervision of Nigerian Banks
During the period, the CBN under the auspices of the Financial
Services Regulation Coordinating Committee (FSRCC) shall
continue to use the consolidated supervision approach in the
oversight of financial holding companies.
111
3.7.2 Cross Border Supervision
The CBN shall grant approval, where appropriate, to commercial
banks with international authorization to establish offshore
subsidiaries. In addition, qualifying banks would only be allowed to
establish offshore subsidiaries in countries with which the CBN has
signed a Memorandum of Understanding. The Framework for Cross
Border Supervision of Nigerian Banks issued in 2011, subject to
revision, shall continue to be the basis for the supervision of Nigerian
banks that have presence outside the country.
To further strengthen the regulation and supervision of cross-border
banks, the CBN shall conduct a country risk assessment in respect of
banks embarking on cross-border expansion during the period.
112
3.7.3 Macro-Prudential Regulation and Stress Testing
The CBN shall sustain the use of top-down quarterly banking industry
solvency and liquidity stress testing, contagion risk analysis and other
macro-prudential tools in assessing the health of banks. Similarly,
banks shall continue to conduct and submit to the CBN their
quarterly bottom-up solvency stress testing reports.
3.7.4 Sanctions for non-compliance with extant AML/CFT

Laws and Regulations
Banks and other financial institutions should note that breaches and
non-compliance with the relevant provisions of the extant laws and
regulations on Anti Money Laundering/Combating the Financing of
Terrorism & Countering Proliferation Financing (AML/CFT/CPF) would
113
be penalised in accordance with the provisions of the CBN AML/CFT
(Administrative Sanctions) Regulations, 2018.
3.7.5 Weights for Risk-Weighted Assets Computation
The appropriate risk weights for various credit exposures shall be as
contained in the Revised Guidance Notes on the Calculation of
Capital Requirements for Credit Risk.
3.7.6 Risk Management, Corporate Governance and

Whistleblowing
The subsisting Corporate Governance Guidelines issued in 2014 by
the CBN for its regulated entities shall remain in force. This
complements the provisions in the Nigerian Code of Corporate
Governance (NCCG) 2018 by the Financial Reporting Council of
Nigeria (FRCN).
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In addition, the CBN will continue to use the Corporate Governance
Scorecard, Annual Board Evaluation Report, monthly and quarterly
rendition of returns to monitor compliance with the Code of
Corporate Governance, Whistle Blowing Guidelines and the Global
Standing Instruction (GSI). Failure or late rendition of returns, by any
bank will attract appropriate sanctions.
3.7.7 Additional Disclosures by Banks
Banks shall continue to publish additional disclosure statements to
strengthen the incentives regime for maintaining sound banking
practices. To enhance transparency, all banks shall continue to
comply with the IFRS.
3.7.8 Supervisory Intervention Framework for the Banking

Industry
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During the period, the CBN’s policies, guidelines and processes for
the prevention, management and containment of bank systemic
distress and crisis shall continue to apply.
3.7.9 Regulation and Supervision of Domestic Systemically

Important Banks in Nigeria
The Framework for the Regulation and Supervision of Domestic
Systemically Important Banks (D-SIBs) in Nigeria and other
supporting guidelines and directives, shall continue to apply during
the period. All D-SIBs shall ensure compliance with the Guideline on
the Minimum Content for Recovery Plans and Requirements for
Resolution Planning issued in November 2016.
3.7.10 Cyber Security Surveillance
To combat the increasing cyber security threat in the banking
industry, DMBs and Payment Service Providers (PSPs) are mandated
116
to adhere to the guidelines on the risk-based cyber security
framework issued by the Bank on October 10, 2018. The Guidelines
specify the minimum cyber security baseline to be put in place by
DMBs and PSPs and mandates the appointment of a Chief
Information Security Officer (CISO) to oversee cyber security issues.
3.7.11 Cyber Security Fund
The CBN shall continue to enforce payment of the mandatory levy
of 0.005 per cent on all electronic transactions by banks and other
financial institutions, pursuant to the Cybercrime (Prohibition,
Prevention, etc.) Act, 2015.
3.7.12 Lending to the Real Sector
As part of measures to increase banks’ lending to the real sector of
the economy, particularly to the MSMEs, the CBN mandates banks
vide a Circular BSD/DIR/GEN/LAB/12/049 dated September 30, 2019

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to increase their loan-to-deposit ratio (LDR) to not less than 65.0 per
cent effective December 31, 2019 subject to periodic review.
3.7.13 Charging of Penalty by Non-Interest Financial Institutions
The CBN, under the auspices of the Financial Regulation Advisory
Council of Experts (FRACE) mandates that charging of penalty by
non-interest banks is only permissible when the customer wilfully
delays payment that is due. However, any income derived from the
imposition of such a penalty must be given to charity. Under no
circumstance shall the bank, its shareholders or staff benefit
therefrom. The charity shall not also contribute nor be included as
part of its Corporate Social Responsibility.
In addition, all Non-Interest Financial Institutions shall comply with
the following guidelines:
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(i) Guidelines for the Regulation and Supervision of
Institutions Offering Non-Interest Financial Services in
Nigeria.
(ii) Guidelines for the Operation of Non-Interest Financial
Instruments by the Central Bank of Nigeria.
(iii) Guidelines on Shariah Governance for Non-Interest
Financial Institutions in Nigeria.
http://www.cenbank.org/OUT/2011/CIRCULARS/FPR/FIN
AL%20GUIDELINES%20ON%20SHARIAH%20GOVERNANCE
.PDF
(iv) Guidelines on the Governance of Advisory Committee of
Experts for Non-Interest (Islamic) Financial Institutions in
Nigeria.
http://www.cenbank/Out/2015/fprd/ACE%20GUIDELINE
S%203.pdf
119
(v) Guidelines on the Governance of Financial Regulation
Advisory Council of Experts for Non-Interest (Islamic)
Financial Institutions in Nigeria
https://www.cbn.gov.ng/out/2015/2015/fprd/frace%20
cog.pdf
(vi) Circular to All Non Interest (Islamic) Financial Institutions
on the Treatment of Hamish Al Jiddiyya (Earnest Deposit)
https://www.cbn.gov.ng/out/2015/fprd/circular%20on%
20non-interest.pdf
(vii) Guidelines on the Regulation and Supervision of Non-
interest (Islamic) Microfinance Banks in Nigeria
https://www.cbn.gov.ng/Out/2017/FPRD/GUIDELINES%2
0FOR%20REG.%20AND%20SUP.%20OF%20NIMFB.pdf
(viii) Guidelines on Disposal of Non-Permissible Income
https://www.cbn.gov.ng/Out/2021/FPRD/GUIDELINES%2
120
0ON%20DISPOSAL%20OF%20NON-
PERMISSIBLE%20ACTIVITIES.pdf
(ix) Guidelines on Islamic Financial Services Board Standards
for Nigerian Non-Financial Institutions.
3.7.14 Curbing the Activities of Illegal Fund Managers
The Bank, under the auspices of FSRCC, shall continue to take
measures to curb the activities of Illegal Fund Managers (IFMs) in the
Nigerian financial system. These measures would include public
enlightenment and collaboration with law enforcement agencies
in effecting the closure of the IFMs.
3.7.15 National Roadmap on Sustainable Finance
All entities in the financial system shall continue to imbibe the
sustainability principles as enshrined in the National Road Map on
Sustainable Finance Principles (NSFP) during the period.

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3.7.16 Competency Framework and Approved Persons’

Regime
The Bank shall continue to enforce the Competency Framework for
the Nigerian Banking Industry and the Revised Assessment Criteria
for Approved Persons’ Regime for Financial Institutions, as may be
amended from time to time.
3.8 Regulation and Supervision of Other Financial Institutions
The CBN shall continue to supervise Other Financial Institutions (OFIs)
to ensure the safety and soundness of the sub-sector. Accordingly,
the following regulatory guidelines shall apply during the period:
3.8.1 Supervisory Methodology
The CBN shall continue to supervise OFIs using the risk-based
supervision methodology. Accordingly, OFIs are required to
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implement appropriate Enterprise Risk Management (ERM)
framework.
3.8.2 Liquidity Ratio
The liquidity ratio of primary mortgage banks (PMBs) and
microfinance banks (MFBs) remains at 20.0 per cent, subject to
periodic review.
3.8.3 Capital Adequacy Requirements
All OFIs shall maintain at all times, a minimum ratio of qualifying
capital to risk-weighted assets of not less than 10.0 per cent, subject
to periodic review.
3.8.4 Limit on Foreign Currency Borrowings

The aggregate foreign currency borrowing of an OFI shall not
exceed 125.0 per cent of its shareholders’ funds unimpaired by
losses or as may be prescribed by the CBN from time to time.
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3.8.5 Uniform Accounting Year-end and Compliance with

International Financial Reporting Standards
All OFIs shall continue to maintain a uniform accounting year-end
of December 31, and prepare financial statements based on IFRS.
They are required to submit their audited financial statements no
later than three (3) months after the end of the financial year.
3.8.6 Supervisory Intervention Framework
In accordance with the extant supervisory intervention framework
for OFIs, deposit taking OFIs are required to develop and implement
comprehensive contingency funding plans that define the manner
in which they would maintain liquidity in the event of a crisis. The
plan must be reviewed annually and approved by their respective
Board of Directors.
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3.8.7 Other Policy Measures
The subsisting Corporate Guidelines for OFIs (MFBs, PMBs, MRCs, FCs,
BDCs and DFIs) issued via circular FPR/DIR/CIR/GEN/07/017 dated
October 26, 2018 shall remain in force. To further deepen the OFIs
sub-sector, the following requirements shall apply during the
period.:
3.8.7.1 Finance Companies
(i) Permissible and Non-permissible Activities
Finance companies shall only engage in permissible activities
specified in the revised guidelines. Finance companies shall not
engage in non-financial activities such as trading, construction,
project management and other financial services such as deposit
taking, stock brokerage, registrar and issuing house businesses. Also,
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leasing companies that engage in finance lease are required to
apply for finance company licence.
(ii) Minimum Capital Requirement
The minimum capital requirement for finance companies (FCs) shall
be N100.00 million or as may be prescribed by the CBN.
(iii) Borrowing and Lending Limits
The minimum amount that a finance company can borrow from
any individual or corporate body shall be N50,000.00 and
N2,000,000.00, respectively.
The maximum loan that a finance company may grant to any
person or the maximum investment a finance company may make
in any venture shall be 20 per cent of its shareholders’ funds
unimpaired by losses.
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3.8.7.2 Primary Mortgage Banks
(i) Permissible and Non-permissible Activities
Primary Mortgage Banks (PMBs) shall continue to engage in
permissible activities as stipulated in the revised guidelines on the
operation of PMBs. PMBs shall not engage in leasing, real estate
development, estate agency or facilities/project management
business. Newly licenced PMBs shall be required to seek written
approval from the CBN to access the National Housing Fund Facility.
(ii) Minimum Capital Requirement
The capital requirement for PMBs is stipulated below and may be
reviewed by the CBN:
Category Capital Requirement Operational Location
State N2.50 billion State-wide
National N5.00 billion Nationwide
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(iii) Lending Limit
All PMBs shall maintain a minimum ratio of 50.0 per cent of
mortgage assets to total assets, of which a minimum of 75.0 per cent
of which must be residential mortgages. A minimum of 60.0 per cent
of PMBs’ loanable funds, defined as total deposits plus on-lending
loans, shall be devoted to the creation of mortgage assets. The
maximum aggregate loan from a PMB to an individual and a
corporate body shall not exceed 5.0 and 20.0 per cent respectively
of its shareholders’ funds unimpaired by losses. The maximum loan-
to-value ratio, which determines the equity contribution of the
borrower, shall be 80.0 per cent. In essence, the borrower’s
contribution must not fall below 20.0 per cent.
The non-performing loans of a PMB shall not exceed 10.0 per cent
of total loans and advances. All PMBs shall be required to comply
128
with the uniform underwriting standards for mortgages and
commercial real estate financing.
(iv) Publication of Annual Financial Statements
All PMBs shall submit their annual audited financial statements and
the abridged version of the accounts to the Director, Other
Financial Institutions Supervision Department for approval before
publication. Subject to the written approval of the CBN, a PMB shall,
not later than 4 months after its financial year-end:
a. publish the abridged version of its approved financial
statements in a daily newspaper printed in and
circulating in Nigeria and approved by the Bank; and
b. exhibit same in a conspicuous position in each of its
offices and branches in Nigeria.
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(v) Cash Reserve Requirement
All PMBs shall continue to maintain a cash reserve requirement
(CRR) of 2.0 per cent of their adjusted deposit liabilities with the CBN
on a monthly basis as stipulated in the Circular referenced
OFI/DIR/GEN/CIR/01/009 of August 25, 2014.
3.8.7.3 Mortgage Refinancing Companies
Mortgage Refinancing Companies (MRCs) are established to
enhance liquidity within the mortgage sub-sector, increase the
availability of mortgages, reduce mortgage and related costs, and
make residential housing more affordable. MRCs shall support
mortgage originators such as PMBs and commercial banks to
increase mortgage lending by refinancing their mortgage loan
portfolios. They shall also act as intermediaries between originators
130
of mortgage loans and capital market investors who typically are
looking for long-dated high-quality securities.
(i) Non-permissible Activities
MRCs shall not grant consumer or commercial loans; originate
primary mortgage loans; and accept demand, saving and time
deposits, or any other type of deposit. In addition, they should not
finance real estate construction, undertake estate agency or
facilities management and other businesses NOT permitted in the
Guidelines.
(ii) Minimum Capital Requirements
The minimum capital for establishing an MRC is N5.00 billion. In
addition to the capital adequacy requirement for all OFIs, every
MRC shall maintain, at all times, a minimum ratio of core capital to
total assets (leverage ratio) of not less than 5.0 per cent.
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3.8.7.4 Microfinance Banks

(i) Minimum Capital Requirements
Effective April 2022, the minimum capital requirements for
Microfinance Banks (MFBs) shall be as stated below or as may be
prescribed by the CBN from time to time.
Classification of Microfinance Banks
Category Capital Operational Location
Requirement
Unit (Tier I) N200.00 One Location (Urban)
Unit (Tier II) Million One Location (Rural/
N50.00 Million Unbanked /
Underbanked)
State N1.00 Billion State-wide
National N5.00 Billion Nationwide
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(ii) Government Ownership of MFBs
The CBN shall continue to encourage state and local government
equity participation in MFBs as allowed under the revised guidelines
to facilitate financial inclusion. However, all such investments shall
be gradually divested to private-sector investors within a maximum
of five (5) years from the date of the initial investment.
(iii) Lending Limits
The loan portfolio of MFBs shall, at all times, comprise a minimum of
80.0 per cent micro-loans. The maximum loan by an MFB to any
individual borrower, director or related borrower shall not exceed
1.0 per cent of the shareholders’ funds unimpaired by losses, while
a maximum of 5.0 per cent is prescribed for corporate/group
borrowers.
133
As part of efforts at promoting effective credit risk management
and corporate governance, aggregate insider-related loans shall
not exceed 5.0 per cent of the shareholders’ funds unimpaired by
losses.
(iv) Branch Expansion
In addition to the Head Office, the CBN will continue to encourage
Unit MFBs that intend to have not more than one (1) branch within
the Local Government Area approved for their operations. This is
subject to the availability of free funds (shareholders’ funds
unimpaired by losses, less fixed assets and long-term investments)
and maintenance of the prescribed minimum prudential
requirements.
(v) Operational Requirements
a. To manage available resources and to enhance
the liquidity of MFBs, the aggregate value of equity
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participation of a MFB in all permissible enterprises
shall not exceed 7.5 per cent of its shareholders’
funds unimpaired by losses.
b. Total investment in fixed assets shall not be more
than 20.0 per cent of shareholders’ funds
unimpaired by losses.
c. Investment in treasury bills is compulsory and shall
not be less than 5.0 per cent of total deposit
liabilities subject to a ceiling of 10.0 per cent.
3.8.7.5 Development Finance Institutions
The CBN shall continue to encourage Development Finance
Institutions (DFIs) to implement appropriate operational models. The
categorisation of DFIs into Wholesale and Retail DFIs shall continue
135
in 2022/2023. All DFIs are required to apply to the CBN for their
choice of DFI licence in line with the extant regulations.
(i) Minimum Capital Requirements
The minimum capital requirement for a Wholesale DFI shall be
N100.00 billion payable over a maximum period of four (4) years,
out of which a minimum of N20.00 billion shall be paid before, the
grant of Approval-in-Principle (AIP).
A Wholesale DFI shall plough back all its profit after tax to reserves
unless it has met the regulatory minimum capital of N100.00 billion
or such other amount as the CBN may specify from time to time.
The minimum capital requirement for a Retail DFI shall be N10.00
billion.
A DFI shall maintain at all times a minimum ratio of Tier I capital to
total assets of 5.0 per cent. Tier II capital, which comprises the DFI’s
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qualifying loan capital, shall not exceed 100 per cent of Tier I
capital.
(ii) Establishment and Operations of Subsidiaries
To ensure transparent financial reporting and focus on core
mandate, all DFIs shall provide comprehensive disclosure on all
subsidiaries and operations of their special purpose vehicles, while
also reporting on a solo and consolidated basis as required by
circular OFI/DIR/CIR /GEN/20/349 of September 3, 2019.
(iii) Limit on Non-performing Loans
The limit of DFIs non-performing loans shall be as prescribed in the
Guidelines for Development Finance Institutions or other extant
regulations.
3.8.7.6 Bureaux De Change
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The CBN shall continue to monitor the operations of Bureaux de
Change (BDCs).
(i) Minimum Capital Requirement
The minimum capital requirement for a BDC shall be N35.00 million,
while the requirement for a mandatory deposit has been
suspended. Multiple ownership of BDCs is NOT permitted and the
CBN shall impose appropriate sanctions when detected.
(ii) Rendition of Returns
BDCs shall render accurate and timely reports of their daily, weekly
and monthly activities in the prescribed format. The returns shall be
rendered as may be prescribed by the CBN from time to time.
Daily and weekly returns shall be submitted by 12.00 noon of the
next working day, while monthly returns shall be submitted on or
before the 5th day of the following month. Where the 5th day is a
weekend or public holiday, returns shall be submitted on the
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preceding working day. Non-compliance with this requirement shall
be a regulatory breach which shall attract appropriate regulatory
sanctions.
(iii) Use of Bank Verification Number for All Foreign Exchange
Transactions
All customers desiring to purchase foreign exchange in Nigeria must
provide their Bank Verification Number (BVN), which must be
validated by a CBN Authorised Foreign Exchange dealer through
NIBSS platform before the transactions are consummated.
Any Authorised Foreign Exchange dealer that fails to provide the
required information in its returns or provide wrong BVN shall be
penalised, which may include withdrawal of its authorised
dealership license (FPR/DIR/CIR/GEN/05/015).
139
(iv) Operating Guidelines
The revised operating guidelines for BDCs issued vide circular
FPR/DIR/GEN/CIR/01/030, dated November 30, 2015 shall continue
to apply during the period.
(v) Foreign Exchange Sales to BDCs
BDCs would continue to source their foreign exchange from
members of the public and any other source as may be prescribed
by CBN from time to time. CBN shall, however, continue to monitor
the activities of the BDCs to ensure that no operator is in violation of
the anti-money laundering regulations.
3.8.7.7 Other Financial Institutions’ Returns to Credit Bureaux
To enhance the quality of credit information available, the CBN shall
continue to monitor and enforce the rendition of credit reports by
lending-OFIs to the Credit Reporting System during the period.
140
3.8.7.8 Rendition of Returns on Anti-Money Laundering (AML)/

Combating the Financing of Terrorism (CFT)
In the period, OFIs shall continue to render returns mandated under
the CBN AML/CFT Regulations, as well as returns on fraud and
forgeries.
3.8.7.9 Payment Service Banks
The key objective of setting up Payment Service Banks (PSBs) is to
enhance financial inclusion by increasing access to deposit
products and payment/remittance services to small businesses, low-
income households and other financially excluded entities.
(i) Operating Guidelines
The operating guidelines for PSBs shall be as contained in the revised
Guidelines for Licensing and Regulation for Payment Service Banks
141
in Nigeria issued via circular FPR/DIR/GEN/CIR/07/060 dated August
27, 2020.
(ii) Permissible and Non-permissible Activities
PSBs shall engage only in permissible activities specified in the
guidelines. These include acceptance of deposits from individuals
and small businesses, payment and remittances services through
various channels within Nigeria and sale of foreign currencies
realised from inbound cross-border personal remittances to
authorised foreign exchange dealers. PSBs shall not grant any form
of loan, accept foreign currency deposit, deal in foreign exchange
market except as prescribed in the permissible activities, provide
insurance underwriting, accept any closed scheme electronic
value as a form of deposit or payment, and establish any subsidiary.
(iii) Minimum Capital Requirements
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The minimum capital requirement for a PSB shall be N5.00 billion or
as may be prescribed by the CBN from time to time.
(iv) Participation in payments and settlement system
PSBs shall participate in the payments and settlement system and
have access to the inter-bank and the CBN collaterised repo
window for its temporary liquidity management.
3.8.7.10 Guide to Charges by Banks, Other Financial and Non-

Bank Financial Institutions
Guide to Bank Charges provides basis for the application of charges
on various products and services offered by banks and other
financial institutions. Regulated entities shall continue to comply
with the revised Guide to Charges by Banks, Other Financial and
Non-Bank Financial Institutions, 2020.
143
The 2020 Guidelines provides among others:
• Downward review of charges for electronic banking
transactions
• Review of other bank charges to align with market
development; and
• Inclusion of new sections on accountability/ responsibility and
sanction regime to directly address instances of excess,
unapproved and/or arbitrary charges.
144
145
SECTION FOUR
4 FOREIGN TRADE & EXCHANGE POLICY MEASURES
4.1 New Policy Measures
The following new policy measures shall apply in the foreign
exchange market during the period.
4.1.1. Items ‘Not Valid for Forex’
To stimulate local production and sustain the gains achieved with
the listing of 41 import items as ‘Not Valid for Forex’ in the Nigerian
foreign exchange market, the CBN expands the list to include
Fertilizer, Milk & Dairy Products, Maize & Corn and Sugar, as
contained in circulars TED/FEM/FPC/GEN/01/001 dated January 30,
2020, TED/FEM/FPC/GEN/01/002 dated February 11, 2020,
TED/FEM/FPC/GEN/01/004 dated July 13, 2020 and
TED/FEM/FPC/GEN/01/006 dated July 16, 2021, respectively.
146
4.1.2 Price Verification System
To ensure prudent use of foreign exchange and eliminate
incidences of over invoicing, transfer pricing, double handling
charges and avoidable costs, Authorized Dealers are required to
only open Forms ‘M’ for Letters of Credit, Bills for Collection and
other forms of payments in favour of ultimate suppliers of products
as contained in circular TED/FEM/FPC/GEN/01/005 dated August
24, 2020.
Accordingly, a Product Price Verification Mechanism would be
used to forestall over-pricing and/or mispricing of goods and
services imported into Nigeria. The price mechanism shall be used
by all Authorized Dealers to verify quoted prices before Form “M”
approval.
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4.1.3 e-Valuator and e-Invoice

The e-invoice will replace the hard copy of final/commercial
invoice as part of documentation required for all import and export
transactions with effect from February 1, 2022. Authorized dealer
banks shall authenticate electronic invoices on the Nigeria Single
Window portal – Trade Monitoring System (TRMS).
Consequently, imports and exports with unit prices that are more
than 2.5 per cent of the verified global checkmate prices would be
queried.
4.1.4 Digital Marine Insurance Certificate
The Digital Marine Insurance Certificate, which replaced the hard
copy in 2020, shall continue to be used on the Nigeria Single
Window for Trade.
148
4.1.5 e-Form ‘NCX’
The e-Form ‘NCX’ for non-commercial export replaced the hard
copy with effect from November 30, 2021. Accordingly, the
processing of Form ‘NCX’ shall be done electronically on the Trade
Monitoring System accessible at www.tradesystem.gov.ng.
4.1.6 e-Form ‘A’
The e-Form ‘A’ for invisible transactions (PTA/BTA, Medical,
Education, and other remittances) replaced the hard copy with
effect from November 30, 2021. Accordingly, the processing of Form
‘A’ shall be done electronically on the Trade Monitoring System
accessible at www.tradesystem.gov.ng.
149
4.1.7 Payment of Diaspora Remittances by International

Money Transfer Operators
In order to deepen the foreign exchange market and provide more
liquidity, beneficiaries of diaspora remittances through International
Money Transfer Operators (IMTOs) are to receive such inflows in
foreign currency either in cash or through their ordinary domiciliary
account.
4.1.8 Naira 4 Dollar Scheme
The CBN, through the commercial banks, shall pay recipients an
incentive of N5 for every USD1 remitted under the ‘Naira 4 Dollar
Scheme’ which was launched on March 8, 2021, to increase inflows
of diaspora remittances.
150
4.1.9 Pan African Payments and Settlement System
The Pan African Payments and Settlement System (PAPSS) allows
cross border retail payment in local currency of the sending country
and receipt of funds in local currency of the beneficiary’s country
as contained in circular TED/FEM/FPC/GEN/01/007 dated October
11, 2021.
4.1.10 RT200 Non-Oil Export Proceed Repatriation Rebate Scheme
To raise $200 billion in FX earnings from non-oil proceeds over the
next 3-5 years, the Bank introduced the RT200 FX Programme. A
major anchor of the program is to improve the non-oil export
proceeds repatriation and incentivise exports proceeds into the FX
market. The scheme shall pay N65 for every US$1 repatriated and
151
sold at the I&E window to ADB for third-party use. Similarly, it shall
pay N35 for every US$1 repatriated and sold into I&E for its own use
on eligible transactions only. The items of import shall however be
for finished or semi-finished goods only.
4.2 Policy Measures Retained
The extant laws and guidelines in the foreign exchange market shall
continue to apply during the period.
4.2.1 Electronic Certificate of Capital Importation
Banks shall continue the processing of Certificate of Capital
Importation (CCI) in respect of foreign currency inflow to the
country via the electronic Certificate of Capital Importation (eCCI)
portal.
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4.2.2 e-Form ‘NXP’
Exporters are required to register e-Form ‘NXP’ with any Authorized
Dealer of their choice prior to shipment. Consequently, Bills of
Lading in respect of exports from Nigeria shall carry the e-Form ‘NXP’
number of the underlying cargo.
The timeline for processing the form remains 48 hours from receipt
of application as stipulated in the circular
TED/FEM/FPC/GEN/01/004 of April 19, 2017.
4.2.3 Form ‘Q’
Payment for eligible imports by Small and Medium Enterprises (SMEs)
valued at not more than USD20,000.00 (Twenty Thousand US Dollars)
per BVN per quarter can be effected by Telegraphic Transfer (TT),
subject to completion of Form “Q” supported with Proforma Invoice.
153
4.2.4 Restriction on Sales/Utilisation of Foreign Exchange
(i) Authorised Dealers are NOT allowed to sell foreign
exchange to BDCs and other Authorised Buyers.
(ii) Authorised Dealers shall utilize interbank funds strictly for
funding of Letters of Credits, Bills for Collection and other
invisible transactions, subject to appropriate
documentation as provided by extant regulation.
(iii) Funds purchased from the interbank shall be utilised within
72 hours from the value date, failing which such funds must
be returned to the CBN for re-purchase at the Bank’s buying
rate.
(iv) Payment for goods and services provided in Nigeria by
resident companies and individuals shall not be made in
foreign currency. It is a punishable offence as stipulated in
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section 20(5) of the CBN Act 2007 for any person or body
corporate to refuse the acceptance of Naira as the legal
tender currency for payment for goods and services in the
country.
4.2.5 Exemptions from foreign exchange restrictions/utilisation
(i) Agencies of government and operators permitted by law
to carry out business transactions in foreign currency are
exempted. Accordingly, payment of port charges to the
Nigerian Ports Authority (NPA), Nigerian Maritime
Administration and Safety Agency (NIMASA), etc by oil
companies shall be done using e-Form “A”.
The CBN shall update the public of the exempted
government agencies and operators from time to time.
155
(ii) Foreigners, visitors and tourists are encouraged to use their
cards for payments or exchange their foreign currency at
any of the Authorized Dealers Buyers outpost including
hotels.
4.2.6 Importation of Foreign Currency

The importation of foreign currency banknotes by Authorized
Dealers shall be with prior approval of the CBN. Any
Authorized Dealer intending to import foreign currency cash is
required to submit an application, stating the amount and
purpose, to the Director, Trade and Exchange Department,
CBN, Abuja for consideration.
4.2.7 Foreign Exchange Importation by Oil and Oil Servicing

Companies
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Foreign exchange brought into the country by oil and oil
servicing companies to meet their local expenses shall
continue to be sold to any bank of their choice including the
CBN. Monthly online returns by both the oil companies and
the banks on such sales and purchases shall be rendered to
the CBN, using the approved format.
4.2.8 Repatriation of export proceeds
Pursuant to the provisions of Memorandum 10 of the Foreign
Exchange Manual in respect of the repatriation of export
proceeds, all Authorized Dealers are required to note the
following:
(i) Proceeds of oil and non-oil exports are to be repatriated into
the export proceeds domiciliary accounts of the respective
exporters’ accounts within 90 days for oil exports and 180 days
157
for non-oil exports, failing which the collecting bank will be
liable to a fine of 10% of the free-on-board (FoB) value including
other penalties as provided in BOFIA 2020.
(ii) Where an exporter fails to repatriate the proceeds into the
export proceeds domiciliary account within the stipulated
period, the exporter shall be liable to a penalty of 1 per cent of
the outstanding export proceeds.
4.2.9 Export Proceeds Domiciliary Accounts
Holders of export proceeds domiciliary accounts shall continue
to use their proceeds for the following:
(i) To finance eligible transactions supported with appropriate
documentation.
(ii) Sell to Authorized Dealers at the Investors’ & Exporters’ (I& E)
window.
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4.2.10 CBN Foreign Exchange Interventions Funds
CBN Foreign exchange intervention funds shall neither be
tradable in the inter-bank foreign exchange market nor sold to
BDCs.
4.2.11 Remittances of Retirement Benefits by Foreign Nationals
Retirement benefits of foreign nationals who contributed to the
pension scheme shall continue to be eligible for remittance
subject to the following documentation requirements:
(i) Duly completed e-Form ‘A’
(ii) Resident permit and/or expatriate quota
(iii) Retirement savings account statement
(iv) National Pension Commission’s (Pencom) approval
159
Personal home remittances from regular earnings by foreign
nationals shall be eligible for remittances subject to
documentation requirements.
4.2.12 Remittance of Family Maintenance Allowance by

Foreign Nationals
Remittances by resident foreign nationals/expatriates for the
maintenance of dependants on their own account or for any
purpose whatsoever are allowed up to 100 per cent of their net
income, while physically resident in Nigeria. Subject to the
following requirements:
(i) Duly completed e-Form ‘A’;
(ii) Tax Certificate/receipt for the relevant period;
(iii) Photocopy of relevant pages of international
passport;
(iv) Valid Resident Permit;

160
(v) Evidence of operation of an account with the bank
and of payment of salaries into the account.
4.2.13 Insurance Premium Remittances
Insurance premium remittances on oil and gas and special risks,
which are handled by foreign brokers/insurers shall be
undertaken in the foreign exchange market. The
documentation requirements are:
(i) Duly completed e-Form ‘A’
(ii) Demand Note/Debit Note from foreign broker/insurer
(iii) Letter of attestation from the National Insurance
Commission (NAICOM)
4.2.14 Declaration of Excess Currency Holdings at Port of Entry
Travelers entering/leaving Nigeria shall be required to declare
any amount in excess of N100,000.00 (one hundred thousand

161
naira only) and /or USD10,000.00 (ten thousand US dollars) or its
equivalent in their possession on arrival or departure from the
country. These amounts may be reviewed by the CBN from time
to time. The declaration on Forms Travel Import (TM) and Travel
Export (TE) of foreign currency imports and exports,
respectively, is required for statistical purposes only.
4.2.15 Advance Payment for Import
In line with the provisions of the Public Procurement Act (PPA)
2007, Advance Payments in respect of imports into Nigeria shall
not exceed 15.00 per cent of the free on board (FoB) value of
the transaction.
4.2.16 Foreign Currency Trading Position
162
Subject to compliance with advised Foreign Currency Trading
Position (FCTP) limits, Authorized Dealers shall continue to deal
freely in autonomous funds in their own right. However, they
shall not be allowed to purchase funds, including inter-bank, on
behalf of a customer without a valid underlying transaction and
supporting documents.
4.2.17 Limit of Foreign Exchange Sales by Bureau De Change
BDCs shall continue to observe a maximum foreign exchange
cash sales limit of USD5,000.00 (Five Thousand Dollars Only) per
approved transaction.
4.2.18 Pooling of funds
Pooling of funds purchased from the CBN with those acquired
from other sources is allowed provided the origin is duly
identified and reported. Consequently, Authorized Dealers

163
shall continue to render appropriate statutory returns on
sources and utilization of funds to the CBN.
4.2.19 Application for Foreign Exchange

All applications for foreign exchange, shall continue to be
approved by banks, subject to stipulated documentation
requirements before the remittance of funds.
4.2.20 Interest on Bills for Collection
The Payment of interest in respect of Bills for Collection shall
continue to be on the tenor of the Bill, which shall not exceed
a maximum of 180 days at an interest rate negotiable subject
to a maximum of 0.5% of the bill value.
4.2.21 Government Guarantees
Private sector transactions shall not qualify for government
guarantees.
164
4.2.22 Travel Allowance Limits
Business Travel Allowance (BTA) and Personal Travel
Allowance (PTA) shall be subject to a maximum of USD5,000.00
(Five Thousand Dollars) and USD4,000.00 (Four Thousand
Dollars) per quarter, respectively.
4.2.23 Capital Repatriation
Remittances in respect of dividends, capital, proceeds of
investment, sale of international air tickets and consultancy
services shall be made through the use of funds from the
autonomous market and the ‘Investors’ & ‘Exporters’ Window.
4.2.24 Issuance of e-Certificate of Capital Importation
165
To streamline the extant regulations on the issuance of eCCI,
Authorized Dealers are required to issue same in respect of
imports of plant and machinery within 24 hours of submission
of final shipping and other relevant documents by the
applicant. Furthermore, where the date of the document (bill
of lading) is older than 6 months at the time of submission, the
Authorized Dealer is required to obtain the approval of the
CBN before issuing the eCCI.
4.2.25 Maintenance of Disbursement Accounts
All foreign shipping companies/local agents shall be required
to maintain disbursement accounts with Authorized Dealers
into which inflows from their principals shall be lodged for the
purpose of payment of statutory fees and other related
charges to Nigerian Ports Authority (NPA), Nigerian Maritime
166
Administration & Safety Agency (NIMASA) and other local
shipping charges that are foreign currency (FCY)
denominated.
Accordingly, foreign shipping companies with local agents
shall NOT be allowed to access all segments of the Nigeria
Foreign Exchange Market to pay statutory charges/fees, as
provided for in the Foreign Exchange Manual.
4.2.26 Processing of e-Form “M” by SMEs
For the purpose of Customs clearance, SMEs intending to
import shall process e-Form “M” through any Authorized
Dealer as provided in Memorandum 9 of the Foreign
Exchange Manual.
4.2.27 Third Parties Transfers from Ordinary Domiciliary

Accounts
167
Where transfers are to be made to third parties from ordinary
domiciliary accounts, the purpose for the transfer should be
provided by the account holder as provided for in
Memorandum 25 of the Foreign Exchange Manual.
4.2.28 Selling Rate of Foreign Exchange by Authorized Dealers
The selling rate of foreign exchange by authorized dealers
shall be the prevailing interbank Naira exchange rate plus a
margin not exceeding two (2) per cent.
4.2.29 Foreign Currency Transactions by Hotels
Only Hotels registered as Authorized Buyers of foreign
exchange shall receive payment of hotel bills in foreign
currency. In addition, the Hotels are allowed to buy foreign
currency, subject to a limit of $5,000 (Five Thousand US Dollars)
per approved transaction. They can also exchange into

168
foreign currency any unused Naira balance received from
guests, subject to evidence of the initial conversion. However,
the payment of such bills in foreign currency shall be at the
discretion of the foreign visitor.
4.2.30 Registration of e-Forms ‘M’ for goods classified as “Not

valid for Foreign Exchange”
(i) All e-Forms ‘M’ to be registered on the Nigerian Single
Window for Trade portal for items classified by CBN as
‘Not Valid’ for Foreign Exchange should be
accompanied with the following documents in addition
to other regulatory permits where applicable:
a. Proforma Invoice from the supplier
b. Insurance Certificate (marine/cargo)
c. Written confirmation from the Authorized Dealer
stating the source of funds including any
documentary evidence.
169
(ii) In addition, Authorized Dealers are required to forward
hard copies of Forms ‘M’ relating to all items “Not valid
for foreign exchange” and the documents indicated
above to the Director, Trade & Exchange Department,
Central Bank of Nigeria, Abuja for necessary approval
before validation.
4.2.31 e-Form ‘M’ Procedure for Importation of Petroleum

Products
For the purpose of establishing Letters of Credit and Bills for
Collection for the importation of petroleum products,
Authorized Dealers shall forward to the Director, Trade &
Exchange Department, all relevant documents for
consideration prior to commencement of the transaction.
Furthermore, the CBN shall be notified within 48 hours by the
170
Authorized Dealers before bidding for funds to pay for such
transactions.
4.2.32 e-Form ‘M’ Procedure
The following procedures shall apply in the processing of e-
Form ‘M’.
i. All imports whether or not exempted from Destination
Inspection Scheme (DIS) shall require the completion of
an e-Form ‘M’.
ii. All imports into Nigeria (except those exempted) shall be
subject to DIS.
iii. The initial validity period of an approved e-Form ‘M’ for
general merchandise shall be 360 days, which may be
extended for another 180 days by the Authorized Dealer.
For capital goods, the initial validity of an approved e-
171
Form ‘M’/LC shall be 720 days subject to a maximum
extension of another 360 days. However, any
subsequent request for revalidation of e-Form ‘M’/LC
shall be submitted to the Director, Trade and Exchange
Department, CBN for consideration and approval.
iv. Post-landing charges on import of equipment shall
continue to be treated as an integral part of the total
cost of projects and of the e-Form ‘M’. No direct or
separate remittance on e-Form ‘A’ in respect of such
charges shall be allowed.
v. Shipping documents predating e-Form ‘M’ and LCs
approval date shall be liable to sanctions in line with the
provisions of BOFIA 2020, as well as other appropriate
sanctions that may be determined from time to time by
the CBN.
172
4.2.33 Import Duty Payment
Import duty payable on items registered under e-Form ‘M’
transactions, whether ’valid’ or ‘not valid’ for foreign
exchange, shall be at the FX closing rate as advised by the
CBN on the date of the duty assessment.
4.2.34 Exports
i. All commercial exports, whether or not exempted from
Pre-shipment Inspection, shall require the completion of
the e-Form ‘NXP’.
ii. The validity of e-Form NXP is six (6) and three (3) months
for non-oil and oil exports, respectively, from the date of
registration, subject to renewal for three (3) months by
the Authorised Dealer. Subsequent request for renewal
173
shall require the approval of the Director, Trade and
Exchange Department, Central Bank of Nigeria, Abuja.
iii. All exports from Nigeria, except those exempted, shall be
subject to Pre-shipment Inspection by a government
appointed inspection agent.
iv. Goods to which this inspection applies shall not be
exported from Nigeria unless an inspection agent has
issued a Clean Certificate of Inspection.
v. Payment for exports from Nigeria shall continue to be by
means of Letters of Credit, Bills for Collection and
Advance Payment. Such exports shall be executed on
FoB or Cost, Insurance and Freight (CIF) basis, depending
on the contract between the exporter and the overseas
buyer.
174
4.2.35 Invisible Trade Transactions
i. Remittances for licences (Trademarks, Patents, Know-
how and Franchise, etc.) or other Industrial Property
Rights shall range between 0.5 to 5.0 per cent of net sales
value, revenue or profit before tax as applicable.
Trademarks fee shall not be allowed in respect of any
agreement where the trademark owner has over 75.0
per cent of the equity in the local company. Companies
with several product lines are required to separate the
net sales of each product line in their audited accounts,
so as to pay royalty for specific product(s) covered by
the industrial property rights, and not on the entire/total
sales of the company.
ii. Fees for Technical Services such as training, installation
and maintenance, etc, shall not be tied to net sales. The

175
fees shall be settled on a per diem, man-hour, man-day,
or man-month basis. Fees for Research & Development
and improvement shall not exceed 1.0 per cent of net
sales.
iii. Management Service fees shall range between 1.0 and
5.0 per cent of the company’s profit before tax.
Management Service fees on products where no profit is
anticipated during the first three to five years shall range
between 1.0 and 2.0 per cent of net sales only.
iv. Annual Technical Support (ATS) fees payable to
Information Technology (IT) licensors shall not exceed
23.0 per cent of the licence fee (the local component of
which must be paid in Naira) and shall commence after
the first year of implementation of the agreement and
shall not last for more than three years. In addition,
176
indigenous local vendors shall be involved in all ATS for
Software Agreements. However, the fees should be paid
in Naira and shall not be less than 40.0 per cent of the ATS
fees.
v. Basic fee or lump sum fee not exceeding 5.0 per cent of
turnover plus an incentive fee not exceeding 12.0 per
cent of Gross Operating Profit (GOP) shall be applicable
on Hotel Services. Other payments which are
internationally acceptable within the applicable hotel
chains may be allowed.
vi. Consultancy fees eligible for remittance shall be a
maximum of 5.0 per cent of project cost and limited to
projects of very high technology content for which
indigenous expertise is not available. Service Agreement
for high technology joint ventures shall continue to
177
include a schedule for the training of Nigerian personnel
for eventual take-over. In addition, Nigerian
professionals shall be involved in the project
implementation from inception to completion.
4.2.36 Miscellaneous Policy Measures
i. Authorized Dealers are to note that funds from the official
foreign exchange window shall not be eligible for
investment in securities denominated in foreign
currencies abroad and setting up of offshore
subsidiaries/branches of Nigerian companies. For the
avoidance of doubt, only funds from other sources shall
be used to finance such transactions.
ii. Appropriate sanctions shall continue to be imposed on
Authorized Dealers who remit funds on the basis of
forged documents, engage in fraudulent transactions,

178
fail to transfer customs revenue to the CBN in
accordance with the laid down procedures, etc.
iii. Sanctions shall also be imposed on bank customers who
breach any of the foreign exchange operational
guidelines.
179
SECTION FIVE
5 CONSUMER PROTECTION
5.1 Operational Structure
The CBN shall sustain the consumer protection architecture in the
banking industry, by enhancing the structures at its Head Office and
Branches. Consequently, the Bank shall treat complaints escalated
by consumers against entities under its regulatory purview and
enforce prescribed consumer protection standards with a view to
promoting good ethical practices by the regulated entities in their
dealings with consumers.
The Bank shall also continue with its consumer education initiatives,
leveraging more on the new media and other contactless
180
information dissemination channels, to sensitise all consumer
segments across the country, on their rights and obligations.
5.2 Consumer Protection Regulation
The CBN shall sustain its consumer protection supervisory oversight
by continuing the implementation of the Consumer Protection
Regulation (CPR) issued in December, 2019.
5.3 Consumer Complaints Resolution and Procedure
The following procedures in resolving consumer complaints
shall apply during the period.
(i) Banks are mandated to assign tracking numbers to all
complaints received and issue acknowledgment
containing the tracking number to all complainants. In
181
addition, daily upload of all complaints received into the
Consumer Complaints Management System (CCMS)
shall continue to be carried out in line with the provision
of Circular CPD/DIR/CIR/01/001 dated December 20,
2018.
(ii) Complaints on point of sale (POS) and automated teller
machine (ATM) channels shall be treated in line with
service level agreements (SLAs) on dispute resolution
stipulated in Guidelines on Operations of Electronic
Payment Channels in Nigeria issued in May 2016.
(iii) Other complaints shall be treated in line with the
timelines for resolution/SLA attached to circular
CPD/DIR/CIR/01/001 dated December 20, 2018.
(iv) Complaints shall only be treated if lodged within a period
of six (6) years from the date of transaction except
182
complaints relating to fraud, complaints already lodged
with the financial institutions or the CBN, or complaints
relating to international electronic payment transactions
as specified in the Circular FPR/DIR/GEN/CIR/05/011
dated August 21, 2015.
(v) Customers are required to escalate their complaints to
the CBN through the Consumer Complaints
Management System (CCMS) public portal and obtain
update on the resolution status.
(vi) Customers who are issued tracking numbers who are
dissatisfied with a financial institution’s decision or
resolution process may escalate their complaints to the
Consumer Protection Department via e-mail to
https://iprotect.cbn.gov.ng, without tracking number to
[email protected] or write to the Director, Consumer

183
Protection Department, Central Bank of Nigeria,
Corporate Headquarters, Central Business District, P.M.B.
0187, Garki, Abuja.
Telephone 07002255226. Complaints can also be lodged
at any of the 37 Branches of the CBN nationwide or any
other channel as may be provided by the CBN from time
to time.
5.4. Help Desks at the CBN
5.4.1. General Complaints and Enquiries
All enquiries/complaints in respect of services rendered by the
Central Bank of Nigeria shall be made to:
Help Desk: [email protected]
184
Address: Director, Governor's Department, Central Bank of
Nigeria, Corporate Headquarters, Central Business District,
P.M.B. 0187, Garki, Abuja. Telephone: 0946236000
5.4.2 eNaira Help Desk
Complaints or enquiries on eNaira can be referred to:
Help Desk: [email protected]
Telephone: 0800MYENAIRA
5.4.3 Foreign Exchange Authorized Dealers/Customers
Complaints and enquiries from the public in respect of trade and
foreign exchange policies and transactions should be referred to:
Help Desk email: [email protected]
185
Address: Director, Trade and Exchange Department, Central
Bank of Nigeria, Corporate Headquarters, Central Business
District, P. M. B. 0187, Garki- Abuja. Telephone: 0946237804
5.4.4 Monetary Policy Help Desk
The General Public can reach the CBN on all Monetary Policy
enquiries using the
Help Desk email: [email protected]
Address: Director, Monetary Policy Department, Central Bank
of Nigeria, Corporate Headquarters, Central Business District,
P. M. B. 0187, Garki -Abuja. Telephone: 0946238900
186
Godwin Ifeanyi Emefiele (CON)
Governor, Central Bank of Nigeria
January 1, 2022.
187
ANNEXURE I: GLOSSARY OF TERMS

TERMS DEFINITION
Authorised Dealers Any bank licensed under the Banks and Other
Financial Institutions Act 1991 as amended and
such other specialised banks issued with license,
to deal in foreign exchange.
Bills of Lading It is a receipt in respect of cargo accepted for

transportation
CBN Bills These are securities issued by the CBN at OMO

auctions for liquidity management purposes. They
evidence the withdrawal of funds from the banking
system. They are tradeable at the secondary market.
Certificate of Capital A certificate issued by a bank confirming an

Importation inflow of foreign currency or goods.
188
TERMS DEFINITION
Cost, Insurance and A trade term requiring the seller to arrange for the
Freight (CIF) carriage of goods by sea to a port of destination
and provide the buyer with the documents
necessary to obtain the goods from the carrier.
COVID-19 Corona Virus Disease 2019 is a contagious disease

which is caused by severe acute respiratory
syndrome coronavirus 2 (SARS-CoV-2).
Currency Swap A foreign exchange transaction which involves

the exchange of principle and interest in one
currency for the same in another currency.
Customer due This is a process by which an entity, for example a

Diligence financial institution, determines the true identity of
a customer and assesses the extent to which that
customer or proposed customer exposes the
entity to risk.
189
TERMS DEFINITION
Deposits held as A deposit that, given the consent of a customer,

collateral is used to secure or part-secure a credit facility.
Though it is not required that a new deposit
account be created to hold deposit being held
as collateral, it may be convenient for such new
account to be created in the customer’s name.
It should be noted that a customer may pledge

his/its deposit as collateral for a facility extended
to another party.
Destination A Customs process of inspecting imports on arrival

Inspection Scheme at the port of discharge/entry.
Domestic D-SIBs are banks that have been designated as

Systemically too big to fail for their systemic importance. In
Important Banks (D- Nigeria, the indicator-based measurement
SIBs) approach as well as, supervisory judgement are
used to determine SIBs.
190
TERMS DEFINITION
eForm ‘A’ Electronic application to pay for service

transactions (invisible trade transactions)
e-Form ‘M’ Electronic application to import goods (visible

trade transactions)
eForm ‘Q’ Electronic application of Forex in respect of

medium and small-scale enterprises.
Electronic Certificate This is the automated system of confirming an

of Capital inflow of foreign currency or goods.
Importation
Eligible transactions Transactions that have been prescribed as

eligible by the CBN and may be reviewed from
time to time
Foreign Currency This is the sum of the structural balance sheet

Trading Position position in each currency plus the dealing
(FCTP) position. It is the maximum exposure (long or
191
TERMS DEFINITION
short) allowed in foreign currency or currencies to

a bank in respect of its daily trade.
Form NXP Application for the commercial export of goods

and services
Free-on-Board (FoB) This is a term in international commercial law

value specifying at what point respective obligations,
costs, and risk involved in the delivery of goods
shift from the seller to the buyer under the
Incoterms 2010 standard published by the
International Chamber of Commerce.
IFEM Forum in which Authorised Dealers buy and sell

foreign exchange among themselves. Also,
Authorised Dealers can sell to Authorised Buyers.
Insider An insider includes a director, a significant

shareholder, an officer, any entity in which a
director has significant shareholding or is a
192
TERMS DEFINITION
director, subsidiaries, and affiliates of the bank or

OFI.
Insider-Related Loans A loan or other credit facility granted to an insider

or his/its related party.
Investors and The Investors’ and Exporters’ Foreign Exchange

Exporters(I&E) Window (I&E FX Window) is the market trading
Window segment for investors, exporters and end-users
that allows for foreign exchange trades to be
made at exchange rates determined based on
prevailing market circumstances, thus ensuring
efficient and effective price discovery in the
Nigerian foreign exchange market. The
exchange window was established by the CBN
via a circular, dated April 21, 2017.
193
TERMS DEFINITION
Letter of Credit (LC) "Any arrangement, however named or

described, that is irrevocable and thereby
constitutes a definite undertaking of the issuing
bank to honour a complying presentation." (UCP
600, article 2)
Monetary Policy Rate It is the policy rate at the disposal of the monetary
(MPR) authorities. The rate is set by Monetary Policy
Committee (MPC) which expectedly anchors on
other interest rates in the financial system and
determine the expansionary or contractionary
stance of a Central Bank.
Money Market The money market consists of financial institutions

Dealers and dealers in money or credit that wish to either
borrow or lend short – term financial instruments
typically up to twelve months, on their own
account or on behalf of other entities.
194
TERMS DEFINITION
Multiple ownership of This refers to a situation in which a single person

BDCs has equity shareholding in more than one bureau
de change.
Net Foreign Currency The net difference between foreign currency

Trading Position cash assets and foreign currency cash liabilities
Net Open Position The net difference between the overall foreign
assets and foreign liabilities of a bank, which
includes on- and off-balance sheet items, as well
as, spot and forward transactions
Net Open Position A bank is considered to have a NOP in the Long

(Long) Position when total foreign assets exceed total
foreign liabilities
Net Open Position NOP is in the Short Position when total foreign
(Short) liabilities exceed total foreign assets
Nigerian Treasury Bills These are money market securities, backed by

the guarantee of the Federal Government, issued
195
TERMS DEFINITION
for tenors of 91 days, 182 days and 364 days at the

primary market auction, which are held fortnightly
or as stipulated in the NTB issuance
calendar/programme.
Open market Open Market Operations (OMO) is a liquidity

Operations management tool used by monetary authorities to
buy or sell government securities in the open market
(primary or secondary) through auctions in order to
expand or contract the amount of money in the
banking system.
Post-landing Charges Post-Landing charges refer to the retention fee of 5 –

15% that an importer may retain and remit to the
supplier after a satisfactory evaluation/performance
of the goods imported. This is usually agreed between
the supplier and importer, and stated in the contract
agreement and proforma invoice.
196
TERMS DEFINITION
Related party This is any natural or legal person that is controlled

by or connected to an insider or any other person
as the CBN may deem from time to time.
Renminbi Currency system of the People’s Republic of

China
Repo (Repurchase A repurchase agreement is a contract in which

Agreement) the vendor of a security agrees to repurchase it
from the buyer at an agreed price. Repos are
money-market instruments, usually used to raise
short-term capital.
Reverse Repo Reverse repurchase agreement is the opposite

of repo. It is the purchase of securities with the
agreement to sell at a higher price at a specific
future date.
197
TERMS DEFINITION
Risk-Based Pricing This refers to the process by which banks compute

Model the interest rates charged based on a customer’s
risk profile.
In order to promote transparency in the pricing

and setting of rates, the CBN vide a circular
referenced BSD/DIR/GEN/CIR/04/015 directed
banks to develop all inclusive risk-based interest
rate pricing models and forward same to the
CBN. DMBs are expected to quote lending rates
as fixed spread over the Monetary Policy Rate.
Special Purpose A deposit made by a customer or transferred

Deposits from his/her account that is not accessible to the
customer, for more than seven (7) days.
Subordinated Debts Subordinated debt is a loan or security that ranks

below other loans and securities with regard to
claims on a company's assets or earnings.
198
TERMS DEFINITION
Sukuk Instruments These are Islamic bonds, structured to generate

returns to investors without infringing on the
principles and provisions of the Islamic law. Sukuk
represents undivided shares in the ownership of
tangible assets relating to particular projects or
special investment activity.
Swaps An over-the-counter contract requiring two

parties to agree to exchange a sequence of
cash flows where payment by one party is
dependent on the movement of an underlying
asset or rate while the other party’s payment is
determined by a different set of underlying asset
rate.
Travel Export (TE) Declaration of export of foreign currency and

financial instruments above US$10,000.00 or its
199
TERMS DEFINITION
equivalent, precious stones, jewellery and works

of art (including antiquities) from Nigeria.
Travel Import (TM) Declaration of import of foreign currency and

financial instruments above US$10,000.00 or its
equivalent, precious stones, jewellery and works
of art (including antiquities) into Nigeria.
‘Valid’ or ‘Not-valid’ When a transaction is ‘Valid’ it implies that the

for Foreign Exchange applicant can access the interbank for funds
and when ‘Not Valid’ it implies the applicant
cannot access the interbank for funding.
200
ANNEXURE II: PRUDENTIAL GUIDELINES FOR LICENCED BANKS
The revised prudential guideline for licensed bank issued by the CBN
which came into effect July 1, 2010 shall continue to be used as a
guide for banks’ operations subject to review from time to time.
Check the CBN website link below:
http://www.cenbank.org/out/2010/publications/bsd/prudential%2
0guidelines%2030%20june%202010%0final%20%20_3_pdf
201
ANNEXURE III: NIFIs FORMAT FOR SUBMISSION OF REQUEST
Address of the Bank/NIFI
The Director,
Financial Markets Department,
Central Bank of Nigeria, Corporate Headquarters,
Central Business District, Abuja,
Federal Capital Territory
Dear Sir,
REQUEST FOR........ (State Name of Instrument, e.g. CSCA Deposit)
In accordance with the “Guidelines for the Operation of Non-
Interest Financial Institutions Instruments by the Central Bank of
Nigeria”, we hereby apply for.............. (State Name of Instrument
e.g. CSCA Deposit, CNIN or CBN-ABS) as follows:

202
Name of Bank: ..................................
Account Number: ...................................
Amount: N......................million
Tenor: .................. (Days, Years)
Effective Date: ...................... (dd/mm/yy)
Maturity: ............... (dd/mm/yy)
Signatory (1) Official Stamp Signatory (2)
Name of Signatory (1) Name of
Signatory (2)
203
ANNEXURE IV: RELEASE OF THE GUIDELINES FOR THE OPERATION OF
NON-INTEREST FINANCIAL INSTRUMENTS BY THE CENTRAL BANK OF
NIGERIA
204
205
206
207
208
209
210
211
ANNEXURE V: INTRODUCTION OF TWO NEW INSTRUMENTS- FUNDING FOR
LIQUIDITY FACILITY AND INTRA-DAY FACILITY FOR NON-INTEREST BANKS
212
213
ANNEXURE VI: RE: GUIDELINES ON ACCESSING THE CBN STANDING
DEPOSIT FACILITY
214
215
216
ANNEXURE VII: GUIDE TO CHARGES BY BANKS AND OTHER FINANCIAL
INSTITUTIONS IN NIGERIA: REMOVAL OF INTEREST RATE AND CAP
217
ANNEXURE VIII: CIRCULARS
218
219
220
221
ANNEXURE XIV - ACCESS TO ALL CIRCULARS AND REGULATIONS
REFERRED TO IN THE GUIDELINES.
https://www.cbn.gov.ng/out/2014/ofisd/pmbs%20maintenance%2
0of%20cash%20reserve%20requirement%20(crr).pdf
https://www.cbn.gov.ng/Out/2015/FPRD/BDC-BVN%20Circular.PDF
https://www.cbn.gov.ng/Out/2015/FPRD/Circular%20on%206
%20year%20time%20bar%20for%20customer%20complaints.p
df
https://www.cbn.gov.ng/Out/2021/OFISD/Adoption%20of%20IFRS
%20BY%20ALL%20OFIs.pdf
https://www.cbn.gov.ng/Out/2021/FPRD/CESSATION%20OF%20NO
N-PERMISSINBLE%20ACTIVITIES%20BY%20MFBs.pdf
222
https://www.cbn.gov.ng/Out/2021/CCD/Circular%20to%20Other%
20Financial%20Institutions%20(OFIs)%20on%20the%20Commence
ment%20of%20enrollment%20of%20All%20DFIs,%20MFBs,%20PMBs
%20and%20FCs%20on%20the%20CRMS.pdf
https://www.cbn.gov.ng/Out/2020/CCD/Regulatory%20And%20Su
pervisory%20Framework%20for%20%20The%20Operations%20of%2
0%20A%20Mortgage%20Refinance%20Company%20(MRC)%20-
Approval%20%20To%20Refinance%20Non-Member%20Banks.pdf
https://www.cbn.gov.ng/Out/2021/FPRD/CESSATION%20OF%20NO
N-PERMISSINBLE%20ACTIVITIES%20BY%20MFBs.pdf
https://www.cbn.gov.ng/Out/2021/CCD/Circular%20to%20Other%
20Financial%20Institutions%20(OFIs)%20on%20the%20Commence
ment%20of%20enrollment%20of%20All%20DFIs,%20MFBs,%20PMBs
%20and%20FCs%20on%20the%20CRMS.pdf
223

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Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2022/2023

CENTRAL BANK OF NIGERIA

MONETARY, CREDIT, FOREIGN TRADE

2.1 Policy Environment ..........................................................................................................................................................................10

2.1.1 Monetary and Credit Developments .............................................................................................................. 11

2.3 Macroeconomic Issues and Policy Challenges in 2020/2021.........................................................................................22

2.3.1 Policy Challenges .............................................................................................................................................. 22

SECTION THREE .........................................................................................................................................................................................................28

3.1 Objectives and Strategy of Policy..............................................................................................................................................28

3.2 Policy Measures ................................................................................................................................................................................29

3.2.1 Open Market Operations .................................................................................................................................. 29

(ii) CBN Non-Interest Note ...................................................................................................................................... 39

3.4.8 Cheque Processing........................................................................................................................................... 77

3.5.1 Development Finance Policies ........................................................................................................................ 81

3.6 Orderly Development of the Banking System .................................................................................................................... 100

3.6.1 Bank Credit Expansion ................................................................................................................................................... 100

3.7.1 Consolidated Supervision of Nigerian Banks .............................................................................................. 111

3.8.1 Supervisory Methodology .............................................................................................................................. 122

4 FOREIGN TRADE & EXCHANGE POLICY MEASURES .................................................................................................................. 146

4.1 New Policy Measures ........................................................................................................................................................................ 146

4.1.1. Items ‘Not Valid for Forex’ ................................................................................................................................................... 146

4.1.2 Price Verification System ............................................................................................................................... 147

4.2.1 Electronic Certificate of Capital Importation ............................................................................................... 152

4.2.21 Government Guarantees ................................................................................................................................ 164

5 CONSUMER PROTECTION .................................................................................................................................................................. 180

5.4.1. General Complaints and Enquiries ........................................................................................................................ 184

continue to conduct monetary policy in line with the Medium-Term

Expenditure Framework (MTEF) of the Federal Government of

Nigeria (FGN) for the attainment of price and financial stability.

Monetary policy in the period shall be anchored on the dual

banking system model (risk-sharing and risk-transfer), market

expectations, fiscal-monetary policy coordination, innovative

financing, and complementary unconventional monetary policies

to respond to shocks. The 2022/2023 Guidelines coincide with the

implementation of the CBN digital currency, the eNaira, which was

In line with the evolving global trend, it shall complement the

existing payment and settlement instruments during the period.

Digital Naira is expected to boost the Gross Domestic Product,

enhance revenue collection of government by blocking leakages,

support the digitalization of the economy, strengthen the

transmission mechanism of monetary policy, and promote financial

The implementation of eNaira shall continue in Phases with the

onboarding of both consumers and merchants. The level of

transactions permitted for various categories of economic agents

shall be based on a tiered structure in compliance with Know Your

Customers (KYC) requirements.

This document outlines the monetary, credit, foreign trade and

exchange policy guidelines applicable to banks and other financial

institutions supervised by the CBN in 2022/2023. The Guidelines may

be adjusted by the CBN without prior notice, to address new

developments in the domestic and global economies in the period.

However, such amendments shall be communicated to the

relevant institutions/stakeholders in supplementary circulars.

This document is organised into five sections. Following the

introduction, section two reviews developments in the global and

domestic economies in 2020 and 2021 to provide a background to

credit measures are enumerated in section three, while the

applicable foreign trade and exchange policy measures are

presented in section four. Section five concludes with consumer