The Central Bank of Nigeria (CBN) has issued revised guidelines titled ‘Guidelines for the Regulation of Representative Offices of Foreign Banks in Nigeria.’
According to the guidelines, foreign banks operating in Nigeria as representative offices will be required to pay a total of N15 million for licensing fees. The fees comprise a non-refundable application fee of N5 million and a non-refundable licensing fee of N10 million.
The CBN stipulates that a representative office of a foreign bank is a liaison office licensed by the CBN that markets the products and services of its parent company. They serve as liaison between the parent and local banks, other financial institutions, private companies, and the general public.
Therefore, such offices serve to showcase the brand and services of their parent companies and can also stimulate foreign direct investment in the host country by connecting capital to various investment opportunities.
However, the guidelines state that representative offices are not allowed to carry out banking business or any other regulated activity in Nigeria. They are also not permitted to provide services designated in Nigeria as banking business or engage in any commercial or trading activity that may lead to issuing invoices for services rendered.
The CBN has warned that any CBN-regulated entity found to be supporting, assisting, harbouring, or facilitating the presence and operations of an unlicensed international financial institution in Nigeria will be liable to severe sanctions, suspension or revocation of their banking license.
The guidelines will apply to all approved and existing representative offices of foreign banks operating in Nigeria, which must comply with the guidelines strictly within six months from the date of the circular.
