By Our Reporter
The Central Bank of Nigeria, Wednesday, directed all existing Bureau De Change Operators to re-apply for new licenses giving six months deadline to meet new minimum capital requirements
The new guidelines introduce two categories of BDCs, Tier 1 and Tier 2, with minimum capital requirements of N2 billion and N500 million respectively.
In a circular issued by the apex bank and signed by the Director of the Financial Policy and Regulation Department, Haruna Mustafa, the CBN said the new measures were designed for more efficient BDC operation and to improve financial accessibility.
But this has caused some dissent among the BDC operators who claim the new directive is against best global practices.
The latest circular titled: “Regulatory and Supervisory Guidelines for BDC Operation in Nigeria” comes a day after the Monetary Policy Committee of the apex bank increased the benchmark lending rate to 26.25 per cent to tackle the country’s soaring inflation.
The circular stated: “As part of reforms to re-position the Bureau De Change (BDC) sub-sector to play its envisioned role in the foreign exchange market in Nigeria, the Central Bank of Nigeria (CBN) issued the Draft Operational Guidelines for BDC Operations in Nigeria in February 2024, for stakeholder comments/inputs.
“Following the conclusion of the stakeholder consultations and in the exercise of the powers conferred on it by Section 56 of the Banks and Other Financial Institutions Act (BOFIA) 2020, the CBN hereby issues the attached Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria 2024 for compliance by all operators and promoters of proposed BDCs in Nigeria.
“The Guidelines, amongst others, introduce new licensing requirements and categories of BDCs as well as revise the permissible activities, financial requirements, corporate governance requirements and AMUCFT/CPF provisions for BDCs.
“All existing BDCs shall; Re-apply for a new license according to any of the Tiers or license category of their choice as provided in the Guidelines;
Reacting to the circular, the President of the Association of Bureau de Change Operators of Nigeria, Aminu Gwadebe, reportedly kicked against the directive noting that the requirement is huge, and the deadline given short.
He said: “The requirement is huge. It is not in line with global practices. Capitalisation in the UK is 50,000 pounds; in Kenya, it is $50,000 and so on. I don’t think it reflects global practice. A BDC is not a deposit taker; it is only buying and selling.
According to Punch Newspapers the ABCON president said the deadline given to BDCs is short.
“When you are giving other sectors, one year, or two years, why the rush with the sub-sector? The deadline is quite short. It is not feasible and then we should also guide against what we are trying to avoid. The CBN in its mind is checkmating money laundering and we may meet money laundering in the future,” he argued.
With reports from the punch newspaper