Foreign banks are restricted from ‘banking businesses’ by CBN
The Central Bank of Nigeria (CBN) has barred foreign banks operating representative offices in Nigeria from providing services designated as ‘banking businesses’ among other aspects of services.
The apex bank disclosed this yesterday in its Guidelines for the regulation of representative offices of foreign banks in Nigeria.
The guideline, according to the CBN, complements its regulation on the scope of banking activities and ancillary matters.
Listing the non-permissible activities for foreign banks operating in the country, the guideline stated:
“Approved Representative Offices shall not engage in the following services/ activities; Provision of services designated in Nigeria as banking business;
Provision of any commercial or trading activity that may lead to the issuance of invoices for services rendered; and Acceptance of orders on behalf of the foreign parent; and engage directly in any financial transaction.’’
However, the CBN guideline added:
“Representative offices of foreign banks serve an important purpose of showcasing the brand and services of its parent company. It can also stimulate foreign direct investment to the host country by connecting capital to various investment opportunities.
“It is in view of these that the CBN issues these guidelines, to specify the requirements for the licensing and operations of approved representative offices of foreign banks in Nigeria.”