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The Central Bank of Nigeria, CBN, has banned representative offices of foreign banks from engaging in banking business in the country.
The apex bank also barred the rep offices from any regulated activity and from commercial or trading activities resulting in the issuance of invoices for services rendered.
The CBN disclosed this yesterday in its Guidelines for the regulation of representative offices of foreign banks in Nigeria.
In a circular signed by the Director Financial Policy and Regulation Department, CBN, Muhammad Musa, the apex bank said that the guidelines were issued based on its mandate to promote financial system stability in the industry.
According to the CBN, an approved representative office of a foreign bank in Nigeria is a liaison office of the foreign bank licensed by the CBN, 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, an affiliate of the foreign parent, 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.
On non permissible activities, the CBN said: “The approved 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; engage directly in any financial transaction; any other activity that may be specified by the CBN from time to time.”
On permissible activities, the CBN said: “Approved representative offices (Office) are permitted to carry out the following activities: Marketing the products and services of its foreign parent or an affiliate of the foreign parent licensed and domiciled outside Nigeria; carrying out research activities in Nigeria on behalf of the foreign parent; 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.”
