Business

CBN approves 2998 new BDCs

Published

8 years ago

May 29, 2016

The Central Bank of Nigeria (CBN) has issued operating licences to 2,998 bureaux de change (BDCs) that met its N35 million mandatory capital base,

The number, up by 34 from previous approved operators, is in line with the apex bank’s plan to deepen the foreign exchange market by getting more BDCs involved in the retail end of the market, ahead of the implementation of its newly introduced flexible exchange rate policy.

Available information from the CBN showed that 34 BDCs recapitalised in the last three months bringing the total number of operators to 2,998 from previous, 2,964 operators.

The CBN has also refunded nearly N100 billion mandatory caution deposits to all the BDCs, after it stopped operators from accessing forex from official windows. Each licenced BDC received N35 million from the apex bank.

A circular signed by CBN Director, Financial Policy & Regulation, Kelvin Amugo said the decision was reached following recent development in the operations of BDCs in the economy, prompting the apex bank to refund the mandatory caution deposit of N35 million each to all registered BDC operators.

He however, said the regulator will retain the N1 million licencing fee paid by each of the operators.
Amugo urged that the eligible BDCs are expected to apply for refund of their caution deposit, attaching evidence of payment and bank transfer details.

Read also: Foreign airlines to shutdown over credit crunch

The CBN is also expected to reopen the banks’ dollar window, shut earlier in the year, for the licenced BDCs.
Reacting, President, Association of Bureau De Change Operator of Nigeria (ABCON), Aminu Gwadabe described the cash refund as a welcome development.

According to him, the refund plan is an indication that the CBN has finally shut its doors to the BDCs.
He said since the caution deposit was to enable operators’ access the official forex window, the stoppage of dollar sales to BDCs by the CBN means the fund should be refunded.

Gwadabe said the operators are still awaiting CBN’s modalities on accessing the autonomous forex market, to enable them continue in business.

He said the fund will go a long way in boosting capacity of operators to stay in business, and also to source funds from other sources.
The ABCON boss said that six units within the CBN are involved with BDC regulations, supervision, licensing, monitoring, saying this constitutes multiple regulation of a unit of the financial sub-sector that is only involved as a small market player.

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