Business

CBN sets limit of dollar sale to BDCs at $30, 000

Published

8 years ago

August 10, 2016

The Central Bank of Nigeria, CBN, on Tuesday directed authorised dealers to sell foreign exchange cash to BDCs subject to a maximum of $30,000 to a BDC per week.

In the new circular, the CBN Acting Director, Trade and Exchange, W.D. Goting, said a BDC is expected to nominate its preferred authorized dealer, a commercial bank, and can only procure the said amount from only that bank of its choice in a week.

The circular further states that any breach of this condition will attract appropriate sanction.

“Foreign exchange cash purchased by BDCs from authorized dealers shall be sold to foreign exchange end-users at a rate not exceeding two per cent margin above the buying rate. For the avoidance of doubt, the two per cent margin stated in three above shall be applicable to all funds to be retailed by BDCs regardless of sources of fund,” the CBN said.

The CBN also said authhorised dealers shall continue to render weekly returns on sales to BDCs and the BDCs shall also continue to render weekly returns on the purchases from authorized dealers.

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“Records shall be maintained for all transactions by the BDCs showing the Bank Verification Number of the end-user, including endorsement of the amount disbursed in the international passport of the beneficiary; International Money Transfer Service Operators shall continue to render weekly returns on their operations with agent banks directly to the CBN as specified,” the bank said.

According to the CBN directive, authorised dealers who are agents to approved International Money Transfers Operators (IMTSO) are to sell foreign currency accruing from inward money remittances to licensed BDCs.

The banks have however gone outside the set guidelines of the CBN by introducing their own rules. The rules, described as stringent, are believed to be tailored towards frustrating the BDCs.

According to the President of the Association of Bureau De Change Operators of Nigeria, ABCON, Aminu Gwadabe, banks are asking BDCs to produce evidence of rendering returns on previously purchased forex, evidence of Corporate Affairs Commission, CAC, filings of company secretary, CBN registration certificate and funding of the beneficiary account.

Gwadabe said the conditions are not only stringent but high-handed.

He called on the apex bank to intervene.

According to him, the banks are only interested in selling to BDCs where they have interest.

CBN however on Tuesday, issued a new circular on the subject.

By Timothy Enietan-Matthews

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