CBN Calls on Banks to Fuel PAPSS Settlements via NFEM

The Central Bank of Nigeria (CBN) has launched an extensive evaluation of the document submission processes for transactions conducted via the Pan-African Payment and Settlement System (PAPSS). This initiative seeks to boost intra-African commerce, foster greater access to finance across the continent, and streamline the effectiveness of inter-country payment systems in Africa.

On Monday, the Central Bank of Nigeria (CBN) released a statement detailing significant revisions to their documentation process in a notice sent to Authorized Dealer Banks (ADB) as well as the broader public.

As part of their continuous initiatives to simplify procedures and facilitate smooth financial exchanges throughout the region, these updated regulations have been introduced by the CBN.

Under the updated regulations, people making low-value transactions of up to $2,000 worth of naira and companies dealing with amounts up to $5,000 worth of naira can now use standard KYC and AML documentation they have previously submitted to their authorized dealers in banks.

This step makes it easier for small-scale deals to meet regulatory standards and cuts down on paperwork.

When transactions surpass the set limits, all involved parties are required to adhere to the complete documentation standards detailed in the CBN Foreign Exchange Manual along with associated bulletins to maintain adherence to regulations.

It is the applicants' duty to ensure that all required regulatory paperwork is readily accessible to help expedite the clearance of goods as stipulated by pertinent governmental bodies.

The updated policy allows ADBs to acquire foreign exchange for PAPPS settlements directly from the Nigerian Foreign Exchange Market, removing the earlier necessity of obtaining forex solely from the CBN.

Furthermore, all export earnings returned through PAPSS should be validated by the respective handling banks to ensure transparency and compliance with regulations.

The Central Bank of Nigeria advised all Deposit Money Banks to implement PAPSS and start initiating transactions as per the revised guidelines.

exporters, importers, and individuals were advised to get acquainted with the updated regulations and utilize PAPPS for smoother cross-border trades throughout Africa.