The Central Bank of Nigeria (CBN) has released guidelines for the conduct of financial transactions under the recently federal government signed currency swap deal with the bank of China.
In the new guidelines that was titled: "Regulations for Transactions with Authorised Dealers in Renminbi," the apex bank said for the purpose of the regulation, authorized dealers shall be deposit money banks and merchant banks.
The apex bank announced that CBN it would conduct bi-weekly Renminbi bidding sessions and the Renminbi sales shall be applicable only to trade-backed transactions.
According to the guideline, all authorised dealers must open Renminbi account with a correspondent bank and advise CBN with its Renminbi Account which may either be with a bank onshore or offshore China.
"Importers intending to import from China shall obtain proforma invoice denominated in Renminbi as part of the documents required for the registration of Form M.
"FX purchased in the window shall not be used for payments on transactions in which the beneficiaries are not in China; and authorized dealers shall not open domiciliary accounts denominated in Renminbi for customers."
In the regulatory framework that was signed by the bank's director, financial markets department, Alvan Ikoku, some of the models for payment would include a letter of credit transaction under which all negotiating documents and/or shipping documents must be routed from the beneficiary through his/her bank to the issuing bank.
It added that documents must be routed to the issuing banks either directly from the supplier's bank or through the offshore correspondent of the issuing bank; and
The document in respect of 'Not Valid' for foreign exchange transactions shall be routed by the supplier directly to the applicant's bank that validates the underlying e-Form M, Ikoku said.