The Central Bank of Nigeria (CBN) has prescribed minimum capital base of $10,000 for banks seeking license to operate in any of the free trade zones (FTZ) in the country.

Mr Godwin Emefiele

This was one of the highlights of the exposure draft of the guidelines for banking operations in free trade zones introduced by the CBN yesterday.

The guidelines among other things banned such banks from accessing foreign exchange through the official foreign exchange market, and restricted their operations to the FTZ for wherein they are licensed to operate.

According to the apex bank, “The objectives of these Guidelines are to complement and enhance the provisions of the Free trade zones (FTZs) Acts; Provide details of regulatory and supervisory requirements necessary to promote efficient and sustainable banking services in Nigeria s FTZs;

Spell out details of permissible and prohibited activities of banks in Nigeria s FTZs; Provide details of incentives available to banks in Nigeria s FTZs.

“The required minimum paid-up capital to operate in a FTZ of Nigeria shall be US$10 million or such other amount as the CBN may from time to time prescribe. In addition, a bank in the FTZ shall meet all the prudential requirements as may be specified from time to time by the CBN. For the avoidance of doubt, any license issued under these Guidelines shall be valid only for the FTZ in respect of which it is issued.

“Pursuant to the relevant provisions of the Free trade zones Acts, a bank operating in   Nigeria s FTZ shall enjoy the following incentives: Freedom to move funds in and out of the zone on all eligible transactions; 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; Exemption from payment of duties on imports of furniture, office equipment and other facilities necessary for its operations; and any other incentives as may be approved by the Authority, from time to time”.