The Central Bank of Nigeria (CBN) on Monday granted foreign banks permission to give loans to Nigerians and companies operating in Nigeria in dollars.
The apex bank adopted this measure to expand dollar liquidity in Nigeria through foreign bank representatives by authorizing foreign banks to work with their parent firms in obtaining and syndicating foreign currency-denominated loans (dollar loans) to Nigerian companies.
The Guidelines for the Regulation of Foreign Bank Representative Offices in Nigeria, signed by the Director of Financial Policy and Regulation Department, Muhammad Musa, stated that the policy corresponds with the CBN’s mandate to maintain financial system stability.
He stated that the rules are supported by Sections 6(1) and 8(1) of the Banks and Other Financial Institutions Act 2020 (BOFIA), which stipulate that “no foreign bank shall operate in Nigeria without the prior approval of the CBN.”
