CBN stops oil firms from remitting 100% of proceeds abroad

Suspends overseas travel allowance

THE Central Bank of Nigeria ( CBN) has stopped international oil companies ( IOCS) operating in the country have from remitting 100 per cent of foreign exchange ( FX) proceeds to parent companies abroad.

The apex bank's director of Trade and Exchange, Hassan Mahmud, who disclosed this via a circular yesterday, said ' cash polling' as it is called impacts the liquidity in the domestic forex market.

The new guideline stipulates that the IOCS will now be allowed to repatriate only 50 per cent of their proceeds immediately while the other 50 per cent will be repatriated 90 days from the day of inflow.

The circular stated further: "The Central Bank has observed that proceeds of crude oil exports by IOCS operating in Nigeria are transferred offshore to fund parent accounts of the IOCS ( otherwise referred to as cash polling). This has an impact on liquidity in the domestic FX market. In line with the ongoing reforms in the FX market, it has become necessary to take measures to address this trend."

CBN said banks will now be allowed to pool cash on behalf of IOCS, subject to a maximum of 50% of the repatriated export proceeds in the first instance while the balance may be repatriated after 90 days from date of inflow of export proceeds.

In the meantime, CBN has stopped dollar cash payments for foreign personal and business travels.

In a major policy change, all authorised dealer banks have now ceased from payout of Personal Travel Allowance ( PTA) and Business Travel Allowance ( BTA) in cash.