CBN approves new guidelines for BDCs
Omeiza Bilal
The Central Bank of Nigeria (CBN) has approved a new guideline for operation of Bureau De Change (BDCs) and directed all BDCs operators (BDCs) to reapply for new licences by June 3, 2024 in order to continue to operate in the foreign exchange market in the country.
The new directive implies that the operating licenses of existing BDCs will no longer be effective as from June 3, almost two weeks from now.
According to the CBN new guideline, Tier one BDCs expected to pay minimum capital requirements of N2 billion, non-refundable application fee of N100 million and non-refundable license fee of N500 million while Tier 2 BDC operators will pay minimum capital requirements of N500 million with non-refundable application fee of N25 million and non-refundable license fee of N200 million.
It said the application for BDC licence shall be processed in two stages, namely: Approval-in Principle (AIP) and final licence.
With the new development in the BDCs foreign exchange sub sector, the CBN has scrapped the previous mandatory caution deposit of N200 million for tier-1 BDC licenses and N50 million for tier-2 licenses.
The apex bank also abolished the previously imposed non-refundable annual license renewal fees of N5 million for tier-1 and N1 million for tier-2 BDCs.
The apex bank had in February this year introduced a new minimum capital for the BDCs as published in the revised Regulatory and Supervisory Guidelines for Bureau de Change (BDC) Operations in Nigeria.
However, the latest order mandating the BDCs to apply for new operating licenses was contained in a circular issued and signed by CBN Director, Financial Policy and Regulation Department, Haruna Mustafa.
According to the circular, the guidelines were part of reforms to re-position the BDC sub-sector to play its envisioned role in the foreign exchange market in Nigeria.
The guidelines also introduced new licensing requirements and categories of BDCs as well as revised the permissible activities, financial requirements, corporate governance requirements and AML/CFT/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. Meet the minimum capital requirements for the license category applied for within six months from the effective date of the Guidelines.”
Also, applicants for new BDC licences are required to meet the conditions for the grant of licence in accordance with the Tier or category of BDC chosen as stipulated in the Guidelines.
BDC operators are also expected to submit the names of promoter, name of the proposed BDC, E-mail address of the promoter and phone number of the promoter according to the new guidelines.
The apex bank further said that the proposed BDC shall not be incorporated with the Corporate Affairs Commission (CAC) until Approval In Principle is granted by the CBN in writing, a copy of which shall be presented to the CAC.
