… did not ban them
The Central Bank of Nigeria has not banned foreign banks from operating in Nigeria as is erroneously reported in some media, but rather, it has issued new operation guidelines for the regulation of Representatives Offices of foreign banks in the country.
It however stated that a ‘Representative Office’ is barred from carrying out banking business or any other regulated activity in Nigeria.
According to the apex bank’s latest guidelines for the operations of representative offices of foreign banks operating in the country, shall apply to A bank licensed under any foreign law, whose registered head office is outside Nigeria.
(b) Any financial institution licensed under foreign law, whose primary business includes the receipt of deposits, granting of loans and/or provision of current and savings accounts.
(c) Any foreign-owned operating bank/financial holding company that is foreign-based, that owns controlling interest in one or more banks or institutions whose primary business includes the receipt of deposits, granting of loans and provision of current and savings accounts.
“The Guidelines shall be read in conjunction with the provisions of the CBN Act, the BOFIA, other subsidiary legislations made under the Acts, as well as written directives, notices, circulars, frameworks and other guidelines that the CBN and other regulators in the financial services sector have issued or may issue from time to time.”
It stated that For the purpose of this guidelines, an approved Representative Office of a Foreign Bank in Nigeria is a liaison office of the foreign bank licensed by the Central Bank of Nigeria, whose sole object is to market the products and services of its foreign parent as well as serve as liaison between its foreign parent and local banks, other financial institutions, private companies and the general public. “An approved representative office is barred from carrying out banking business or any other regulated activity in Nigeria.”
Approved Offices are permitted to carry out the following activities:
(i) Marketing the products and services of its foreign parent or an affiliate of the foreign parent licensed and domiciled outside Nigeria.
(ii) Carrying out research activities in Nigeria on behalf of the foreign parent.
(iii) Serving as a liaison between the foreign parent and local banks, private institutions within Nigeria and other customers of the foreign parent based in Nigeria.
(iv)Pursue business opportunities for the foreign parent or affiliated institutions regarding the availing and/or syndication of foreign currency denominated loans.
(v) Connect banks and other financial institutions to its foreign parent.
(vi)Assist exporters in Nigeria with information related to the laws and markets of target countries in which the foreign parent or any of the Group’s affiliates has a subsidiary.
(vii) Facilitating seminars, forums and other activities within Nigeria through which a foreign parent may meet with and hold further discussions with existing or potential customers in Nigeria.
(viii) Collate and distribute economic and financial information or country reports to its foreign parent for use by customers of the foreign parent; and assist customers of the foreign parents that desire to invest in Nigeria or do business with Nigerian companies.
(ix) Connect exporters in Nigeria with potential customers in jurisdictions where the parent company operates; and assist Nigerian exporters with finding 7 new markets through its international offices.
While the following are the non permissible activities for such Representative offices or approved Representative Offices shall not engage in the following services/activities: (i) Provision of services designated in Nigeria as banking business. (ii) Provision of any commercial or trading activity that may lead to the issuance of invoices for services rendered. (iii) Acceptance of orders on behalf of the foreign parent. (iv)Engage directly in any financial transaction, save for those transactions that are related to (3.1 of the guideline.