Regulatory Alerts2007-05-24 | TED-FEM-FPC-GEN-01-064-07Re: Unutilised Balances of Letters of Credit and Interest on NOSTRO Accounts
The Central Bank of Nigeria informs Authorized Dealers that due to the introduction of the Wholesale Dutch Auction System and ongoing foreign exchange market liberalization, unutilized letters of credit balances are now purchased by dealing banks instead of returning to the CBN. Interest earned on collateralized letters of credit will also be purchased by Authorized Dealers, distributing proceeds quarterly. This circular supersedes previous circulars from March 23 and May 25, 2000.
Tel: 09 616 37 804 May 23, 2007 Fax: 09 616 37 802 Central Bank of Nigeria Central Business District P.M.B. 0187 Garki, Abuja E-mail address: ted@cenbank.org REF: TED/FEM/FPC/GEN/01/060 May 22, 2007 TO: ALL AUTHORISED DEALERS RE: UNUTILIZED BALANCES OF LETTERS OF CREDIT AND INTEREST EARNED ON NOSTRO ACCOUNTS This is to inform all Authorized Dealers that following the introduction of the Wholesale Dutch Auction System (WDAS) coupled with the on-going liberalization of the Foreign Exchange Market, unutilized letters of credit balances shall now be purchased by the dealing bank instead of returning to the Central Bank of Nigeria. The naira proceeds of such purchases should be credited to the accounts of the affected customer(s).
Furthermore, interest earned on all funds which are collateralized against customers' letters of credit shall henceforth be purchased by Authorized Dealers. The Naira proceeds should be distributed to the affected customers on a quarterly basis and appropriate returns rendered using eFASS.
This circular supersedes the provisions of the circulars reference No.
BED/FEID/CIR/VOL.1 of March 23 and TED/AD/13/2000 of May 25, 2000. O.O. AKANJI (MRS.) DIRECTOR TRADE & EXCHANGE DEPARTMENT