The Central Bank of Nigeria (CBN) has recently released guidelines for the newly introduced Non-Resident Nigerian (NRN) accounts, which include two main categories: the Non-Resident Nigerian Ordinary Account (NRNOA) and the Non-Resident Nigerian Investment Account (NRNIA).
Henzodaily.ng reported that the CBN non-resident accounts for Nigerians abroad are designed to make remittances, investment, and fund management easy for the diaspora community.
CBN wants to boost diaspora remittance
Photo credit: cbn
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CBN noted that the new accounts are intended to improve NRNs’ access to financial services and enable them to contribute more to Nigeria’s socio-economic development.
The account would also allow NRNs to manage their funds directly, eliminating the need for third parties in local commitments and obligations.
Here is the framework for the operation of the non-resident accounts:
Non-Resident Nigerian Ordinary Account (NRNOA)
This account enables Non-Resident Nigerians (NRNs) to remit their foreign earnings to Nigeria and manage funds in both foreign and local currencies. Account holders may maintain both a foreign currency (FCY) account and/or a local currency (Naira) account.
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Currency:
Held in freely convertible foreign currencies as specified by the Central Bank of Nigeria (CBN).
Account holders may also maintain a Naira (NGN) account, with funds remitted directly from offshore or convertible from an FCY account at prevailing exchange rates through Authorized Dealers.
Purpose:
Depositing foreign income earned by individuals residing outside Nigeria, including salaries, allowances, dividends, and rental income.
Meeting personal expenses such as family maintenance, education, healthcare, and other day-to-day needs in Nigeria, ensuring convenience and ease of use.
Taxation:
Interest earned on deposits will be subject to applicable taxes in line with the tax laws of the Federal Republic of Nigeria.
Repatriation:
Balances in the FCY account can be fully repatriated out of Nigeria without restriction, DailyTrust reports.
Interest rates:
Interest rates on balances are negotiable with the preferred bank.
Conversion flexibility:
Funds can be freely converted into Naira at prevailing exchange rates through Authorized Dealers.
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Regulatory compliance:
Aligns with international Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) standards to ensure transparent fund flows and mitigate risks.
Non-Resident Nigerian Investment Account (NRNIA)
This account enables non-resident Nigerians (NRNs) to invest in Nigeria’s assets in either foreign currency (FCY) or local currency (Naira).
Currency Accounts:
NRNs can maintain both foreign currency (FCY) and local currency (Naira) accounts.
FCY accounts may hold freely convertible currencies as specified by the Central Bank of Nigeria (CBN).
Local currency accounts (NGN) are for investments in domestic assets.
Investment opportunities:
FCY Investments: Includes FCY domestic bonds, fixed deposits, and other eligible FCY-denominated assets.
Local Currency Investments: Includes equities, government securities, mortgage products, and other local investment instruments.
Repatriation:
Funds in the NRNIA account, including principal and profits, can be repatriated from Nigeria without restrictions, ensuring capital mobility.
Interest rates:
Interest rates on deposits are negotiable with the chosen bank.
Regulatory compliance:
To ensure secure transactions, accounts must comply with global Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) standards.
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Flexibility for dual investments:
NRNs can invest in both foreign and local currency assets, promoting diversification of investment portfolios.
Eligibility criteria:
Investors must present valid documentation like a Nigerian or foreign passport, proof of residency, and other necessary forms, including FATCA compliance for U.S. investors.
Documentation
Proof of residency, tax payment receipts, and bank statements are required to verify income and residency status.
Employment status:
For salaried individuals: salary slips, bank statements, or tax receipts.
For self-employed individuals: business registration documents, bank statements, or tax receipts.
Digital platforms:
Digital platforms will be used for seamless onboarding, KYC updates, and facilitating access to NRN accounts, integrated with platforms like NIBSS NRBVN.
Repatriation of Funds:
FCY and NGN balances in NRN accounts can be repatriated without restrictions, provided proper documentation is available for NGN accounts.
Local transfers:
Deposits into NRN accounts must originate from external sources, with local deposits only allowed from traceable foreign inflows or approved local investments.
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Transfers to other local accounts within Nigeria are allowed in Naira.
Cash withdrawals:
Cash withdrawals are subject to Nigerian law and regulations.
Integration with Nigeria’s financial markets:
NRNs can use their NRNIA accounts to invest in both local and foreign currency-denominated financial instruments. However, investments in Nigeria’s equities and debt markets are conducted in Naira.
Tax and fiscal policy:
All investments are subject to Nigerian taxes.
CBN managing dormant account
Henzodaily.ng reported that Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), has explained its decision to take the position of dormant account.
The apex bank governor expressed worry about the susceptibility of inactive bank accounts to fraudulent activity.
The CBN intended to allocate funds from dormant accounts, unclaimed balances, and other financial assets into Nigerian Treasury Bills (NTBs) and other government securities.
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Source: Henzodaily.ng