Polaris Bank begins payment of N5 for every $1 of diaspora remittances

Polaris Bank says it has begun to pay an extra N5 for every dollar received into domiciliary accounts or as cash over the counter.

Innocent C. Ike, the bank’s acting managing director, said the decision aligns with efforts to encourage the inflow of diaspora remittances into the country.

Ike said there is growing evidence of a positive relationship between diaspora remittances and economic growth.

The Central Bank of Nigeria (CBN) recently introduced a ‘Naira 4 Dollar Scheme’ — an incentive for senders and recipients of international money transfers.

The scheme runs from March 8 to May 8.

Ike described the CBN directive as an unprecedented incentive for senders and recipients of international money transfers.

Nigeria’s foreign exchange (FX) earnings suffered a sharp decline following the decline in crude oil prices and the impact of the coronavirus pandemic.

As a result, there has been an acute shortage of dollars in the economy, and banks were forced to ration forex amongst customers.

Banks also restricted transfers between customers who own domiciliary accounts.

This forced the apex bank to look for alternative sources to boost the nation’s FX earnings through diaspora remittances.

In December 2020, the CBN moved to improve dollar liquidity in the country by directing international money transfer operators (IMTOs) and unlicensed companies to stop facilitating diaspora remittances in naira.

It also directed banks to pay remittance inflows in forex.