The Central Bank of Nigeria (CBN) has released the approved guidelines for operations of Bureau De Change (BDCs) across the country while asking BDCs to reapply for licensing online with the new regulatory requirements in the next six months.
This was disclosed in a revised guideline for the operations of BDCs signed by the bank’s Director Financial Policy and Regulation Department, Haruna .B. Mustafa.
According to the new regulatory requirements, Tier-1 BDCs are mandated to have a minimum capital base of N2 billion while that of Tier-1 was set at N500 million.
Furthermore, the bank set the application fee for Tier-1 license at N1 million and that of Tier-2 at N250 thousand. The licensing fees for Tier-1 and Tier-2 BDCs were set at N5 million and N2 million respectively.
The bank also asked BDCS to meet the requirements of the Tier of license they are applying for within the next six months.
It stated, “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.”
Meet the minimum capital requirements for the license category applied for within six (6) months from the effective date of the Guidelines.”
The new guidelines approved for Tier-1 BDCs allowed them to operate across the 36 states of the country and FCT and open franchises all over the country subject to the approval of the CBN.
Some of the new guidelines for BDCs going forward include; banning BDCs from futures, options and derivative trading, carrying out outward international transfers, receiving international inward transfers, dealing on crypto assets or entities that deal with crypto assets and others.
Conditions for the sale of BDCs
Furthermore, the bank listed the conditions for the sale of forex by BDCs to include the following;
- Personal Travel Allowance (PTA).
- Business Travel Allowance (BTA), provided that a person who receives BTA on behalf of a non-individual entity shall not be entitled to PTA for the same trip.
- Payment of overseas medical bills.
- Payment of school fees abroad.
- Payment of professional examination and annual subscription fees.
- Repurchase of unused Naira from a non-resident. For this purpose, repurchase shall only occur upon presentation of the receipt issued at the point of purchase of the Naira. The restriction in (c) below on cash payments shall not apply if the original transaction was a cash transaction.
Backstory
Earlier in February, the CBN released a draft guideline of the proposed regulation of Bureau De Change (BDCs) operations across the country as a method geared towards sanitising the sector.
The draft regulation shockingly among others raised the minimum share capital to N 2 billion– it had been set at N35 million before this change. The new regulation for BDCs is a revision of the 2015 guideline.
The increase in minimum share capital might significantly reduce the number of BDCs in operation across the country or lead to M&As.
