Regulatory Alerts2016-02-01 | BPS/DIR/GEN/WEB/01/003Guidelines for Banking Operations in the Free Trade Zones in Nigeria
The Central Bank of Nigeria (CBN) issues guidelines for banking operations in the country's free zones, with the aim to complement and enhance the Free Zones Acts. These guidelines outline regulatory and supervisory requirements for banks, detailing permissible and prohibited activities, and incentives such as freedom to move funds and exemption from certain taxes. The CBN also specifies requirements for establishing a bank in a free zone, including minimum paid-up capital and disclosure of interests by directors and key officers. Banks in free zones are subject to prudential and disclosure requirements, and must adhere to anti-money laundering and counter-terrorism financing legislations. Disputes between banks and customers can be resolved through CBN's framework or an arbitral panel. The CBN may revoke a bank's license for non-compliance with guidelines or directives. The document also provides an operating manual for banks in free zones, covering sources and utilization of funds, and requirements for processing foreign exchange applications.