SAN FRANCISCO, February 02, (THEWILL) – The Central Bank of Nigeria (CBN) has maintained that deposit money banks or any enterprise that wants to carry on banking business in Nigeria’s Free Trade Zones (FTZs) are required to pay a minimum paid-up capital of $10 million.
The CBN in a “Guidelines for Banking Operations in the Free Zone in Nigeria,” noted that only banks or financial holding companies licensed under Banks and Other Financial Institutions Act (BOFIA), or licensed foreign banks shall qualify to apply to the Nigerian Export Processing Zone Authority (NEPZA) for approval to establish presence to carry on banking business in Nigeria’s FTZs.
The guidelines stated that “an application to establish a bank in a FTZ shall be submitted by the parent bank to the Authority along with the relevant fees, which shall be forwarded to the CBN by the Authority with complete documents that include an application letter; evidence of payment to the CBN of a non-refundable application fee of $10,000 or such other amount as the CBN may prescribe from time to time and evidence of deposit of the prescribed minimum paid-up share capital with the CBN among others.”
According to the guidelines, “the CBN in reviewing the application and supporting documents may request for additional information, documents, and reports, as it may consider necessary. Where the application for a license is unsuccessful, the CBN shall release the capital deposit plus accrued interest within 30 days on receipt of a formal request by the promoters.
“Where the CBN considers the application satisfactory, it shall grant a final license not later than three months from the receipt of complete information/documentation upon the payment of a license fee of $20,000 or such amount as the CBN may prescribe.
“It shall be the duty of a director of a bank in a FTZ who is in anyway, interested in the grant of an advance, loan or credit facility with the bank in the FTZ to declare the nature of his interest to a meeting of the Board of Directors of the bank”, the CBN said in the guidelines.
The CBN said a bank operating in Nigeria’s FTZ shall enjoy incentives such as freedom to move funds in and out of the zone on all eligible transactions; and exemption from stamp duties on all its documents, exemption from withholding tax deductions on interest payable on deposits, dividends and royalties; exemption from corporate and capital gains taxes; among others.
