Bank

2024

Change

The <a href="http://cbn.gov.ng" target="_blank" rel="noopener">Central Bank of Nigeria</a>, CBN, has directed all existing Bureau de Change (BDC) operators in the country to reapply for their licences. This was disclosed in a circular signed by the CBN’s Director of Financial Policy and Regulatory Department, Haruna Mustapha. 
According to the CBN, the new directive represents the outcome of the stakeholder consultations it embarked upon for the Draft Operational Guidelines for BDC Operations in Nigeria issued in February 2024. The apex bank said it was 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. 
“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 circular reads. 
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 <img loading="lazy" decoding="async" width="650" height="350" src="https://technext24.com/wp-content/uploads/2024/05/Olayeni-Cardoso.jpeg" alt="0.5% Cybersecurity Levy: CBN directs banks to halt implementation" class="wp-image-231663">
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 Central Bank Governor, Olayemi Cardoso
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“All existing BDCs and promoters of proposed BDCs are to note the following: Re-apply for a new license according to any of the Tiers or license category of their choice as provided in the Guidelines,” the circular says. 
The bank also directed the BDC operators to meet the minimum capital requirements within six months. 
<h4 id="other-guidelines-for-bdc-operators" class="wp-block-heading">Other guidelines for BDC operators</h4> 
The bank also ordered the removal of the mandatory caution deposit of N200 million for tier-1 licence holders. Furthermore, the N50 million for tier-2 licence holders was also removed by the apex bank as well as the non-refundable annual licence renewal fee of N5 million and N1 million for tier-1 and tier-2 BDCs, respectively. 
The apex bank also prescribed a minimum capital requirement of N2 billion for Tier 1 operators and N500 million for Tier 2 operators. Tier 1 operators are also mandated to pay a non-refundable application fee of N1 million hile Tier 2 operators are to pay N250,000. Finally, there is a non-refundable licence fee of N5 million for Tier 1 and N2 million for Tier 2. 
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Banks and other financial institutions as well as telecommunications companies, staff of regulatory bodies, people who own stakes in other BDCs, public officers, NGO’s, charitable organisations, non-Nigerians, and academic institutions are some of the entities barred from owning or operating Bureau de Changes. 
Furthermore, the regulation bars BDCs or their franchisees from engaging in activities like street-trading of foreign currencies, accepting or granting loans, maintaining any type of account, owning off-shore businesses, owning bank accounts outside Nigeria without CBN approval, dealing in gold or other precious metals and receiving international inward transfers, except for BDCs that serve as cash-out points for IMTOs. 
Others include selling foreign exchange on credit to any customer, trade-related import activities, serving as payment or collection agents on behalf of customers, carrying out the capital market, insurance and/or pension sector activities, establishing subsidiaries, or foreign exchange transactions that involve illicit financial flows. 
See also: <a href="https://technext24.com/2024/05/22/binance-executive-gambaryan-fails-court/">Alleged tax evasion: Binance executive Gambaryan fails to show up in court</a>

CBN orders BDCs to re-apply for new licences, bans street trading of foreign currencies and gold

Technext.ng

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