CBN begins refund of capital deposits, license fee to BDCs

The Central Bank of Nigeria (CBN) has announced it will commence immediate refund of minimum capital deposits and licensing fees to Bureaux de change (BDCs) promoters with pending applications.

CBN disclosed this in a circular to BDCs and all Deposit Money Banks published on its website on Thursday, July 28, 2021.

The move follows CBN decision to discontinue selling forex to BDCs and also suspend issuing new licences.

Ripples Nigeria understands that to become a BDC operator the requirements include a minimum capital requirement of N35 million for operators; a mandatory cautionary deposit of N35 million; an application fee of N100,000; licensing fee of N1 million and annual license renewal fee of N250,000.

The circular signed by Ibrahim S. Tukar Director, Financial and Regulation Department of CBN instructed deposit banks to stop accepting instructions from customers to transfer capital deposits of N35 million to the designated CBN account for the purpose of applying for BDC Incense.

The statement partly reads: CBN advice BDC promoters where applicable to forward their request for the refund in writing to the director, financial policy and regulation department, Central Bank of Nigeria, Abuja.

“The request should be accompanied with account details for the refund which should be the same as the account from which the deposit originated.

Also, CBN wants a copy of the bank draft/telex for payment of licensing fee of N1 million if any.

Read also: CBN directs banks to set up teller points for forex

Other instructions for BDC operators can be found here.

On Tuesday, CBN governor Godwin Emefiele had described the activities of the BDCs as promoting fraudulent activities and bringing pains to Nigeria.

He said, “BDCs have abandoned the original objective of their establishment, which was to serve retail end-users who need US$5,000 or less to help maintain price stability in the market since the CBN had been selling forex to them. Instead, they have become wholesale dealers in foreign exchange.

“They have remained renegade and so greedy, recalcitrant with abnormally high profit from these sales while ordinary Nigerians have been left to feel the pain and therefore suffer.

“Given this rent-seeking behavior, it is not surprising that since the CBN began to sell forex to the BDCs, the number of operators has risen from a mere 74 in 2005 to over 2,700 in 2016, and almost 5,500 BDCs as of today.

“Additionally, the CBN gets no less than 500 new applications from BDC licences every month, and we begin to question, what is in this industry that everyone must be in it?” he had queried.

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