By 
The Central Bank of Nigeria, CBN, has directed International Oil Companies, IOCs, operating in Nigeria to immediately stop remitting 100 percent of their foreign exchange proceeds to their parent company abroad.
CBN disclosed this in a circular signed by its Director of Trade and Exchange, Hassan Mahmud where it stated that the practice known as cash polling has an impact on liquidity in the domestic foreign exchange market.
In the new guidelines, IOCs will now be permitted to repatriate only 50 percent of their proceeds immediately while the other 50 percent will be repatriated 90 days from the day of inflow.
The circular reads, “The Central Bank has observed that proceeds of crude oil exports by International Oil Companies, IOCs, operating in Nigeria are transferred offshore to fund parent accounts of the IOCs (otherwise referred to as cash polling). This has an impact on liquidity in the domestic foreign exchange market”
“In line with the ongoing reforms in the foreign exchange market, it has become necessary to take measures to address this trend. Consequently, the CBN hereby directs as follows;
“Banks are allowed to pool cash on behalf of IOCs, subject to a maximum of 50 percent of the repatriated export proceeds in the first instance.
“The Balance 50 percent may be repatriated after 90 days from the date of inflow of export proceeds.”
Furthermore, CBN introduced rules that will guide the cash polling by IOCs going forward.
They include approval from the apex bank before repatriation of funds under the cash polling framework, parent entity of IOCs will have to reach an agreement with the CBN before cash polling.
CBN also required IOCs to submit statements of expenditure incurred in the period before the cash polling.
Others are; Evidence of the source of foreign exchange inflow and Completion of relevant foreign exchange form(s) as required under extant regulations.
The CBN has now mandated all banks to inform their customers and comply with the regulations.
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