Operational Guidelines For Representative Offices Of Foreign Banks

Challenger banks now have a window to establish a representative office in Nigeria. This is because of the newly proposed CBN Guideline on the Regulation of Representative Offices of Foreign Banks in Nigeria (the “Regulations”).

Although the Regulations also apply to traditional banks, setting up a representative office in a foreign country, is a familiar business strategy for traditional banks. A number of foreign commercial and investment banks, including JP Morgan¹ have set up representative offices in Nigeria. Similarly, a number of Nigerian banks have representative offices, set up, overseas.

For the bank representative offices already registered in Nigeria, the Regulations attempt to address some of the gaps in the existing regulatory framework. In particular, the newly proposed regulations clarifies that, the representative office of a foreign bank is prohibited from accepting deposits, lending money or receiving payments for goods and services. A