The Central Bank of Nigeria (CBN) on Tuesday allocated a total of $200 million to all commercial banks in the country as part of efforts to meet the foreign exchange demand for legitimate end users across the country and move against forex speculation.
The action by the apex bank is coming after it announced the discontinuation of forex sales to Bureau De Change (BDC) operators in the country.
READ: CBN accuses embassies, international organizations of forex regulations contravention
According to Thisday, a senior official of the CBN said that all bank customers that require forex for legitimate transactions such as school fees, Personal Travel Allowance (PTA), Basic Travel Allowance (BTA) and medical payments would be required to undergo minimal documentation to assess the greenback.
Emefiele directed all commercial banks to immediately create designated branches for the sale and disposal of forex to customers who deserve it for legitimate purposes as the CBN would now channel weekly FX allocations hitherto meant for BDCs to commercial banks.
The CBN boss said commercial banks were now permitted to begin accepting FX cash deposits from their customers and explained that the measures were to ensure that the apex bank was better able to carry out its mandate in an effective and efficient manner as well as to guarantee the preservation of the commonwealth and financial system stability.
READ: CBN stops issuance of new licenses to BDCs
Emefiele said the decision to eliminate the BDC operators from the FX market was necessitated by their dubious and unwholesome practices, adding that the operators have gone beyond their primary role of being retail dealers of forex to wholesale dealers.
He noted that as soon as a customer provides the basic documentation to buy foreign exchange, all the banks must immediately meet that demand or sell the forex to the customer within a stipulated timeframe.
While warning the banks against such contraventions, Emefiele advised that any customer who doesn’t receive forex along these lines must report this to their banks and where they are unsatisfied with the resolution, they are required to contact the CBN on toll-free line 07002255226 or email cbd@cbn.ng to lodge the complaints with details of the bank transaction.
READ: CBN blows hot, bans sale of forex to BDCs
What you should know
It can be recalled that the CBN Governor, Godwin Emefiele, in an unexpected move, announced the stoppage of forex allocation to the BDCs accusing them of unwholesome practices and now being agents that facilitate graft and corruption in the country.
Emefiele expressed great concern and disappointment about the activities of the BDC operators who abandoned the original objectives of their establishment to serve retail end users who need $5,000 or less and instead, became wholesale dealers in forex to the tune of millions of dollars per transaction.
He also added that BDCs had resorted to the financing of unauthorised transactions with forex procured from the CBN.
Let’s hope the commercial banks can desist from selling to BDCs and other brokers thru the back door at higher rates. Although I believe that the quantum of looted funds seeking dollar denomination for various illegal purposes will continue to drive up demand at the parallel market pushing prices higher and higher. And with many importers driven to the parallel market due to inability of their banks to meet their dollar needs, we may see an even greater gap open up between the official and parallel rates if the CBN does not administer and monitor this properly.
I am so happy regarding the ban of BDC in Nigeria.
It was just an attempt to rape our Reserve over years through enriching some group of people who called themselves as BDC operators.
I knew an indian man who owns 29 BDC license as of last 3 years may be by now he must have acquired 100 license .
This means this indian is getting not less than 120 million Naira from Nigeria.