CBN Cuts Bureau de Changes’ Dollar Sales To $10,000


The Central Bank of Nigeria (CBN) will on Wednesday sell $10,000 to each of the 2,839 bureaux de change (BDC) operators it approved last week. President, Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, who made this known yesterday, said the CBN took the decision because demand for dollar is still low as business activities were yet to pick up after the holidays.

He said the CBN has promised to continue the intervention to bridge the widening gap between the official and parallel market rates, saying the naira still exchanges for between N262 to N265 against the dollar at the parallel market, but exchanges for N199 at the official market. Also, the CBN has issued new guidelines for the operation of BDCs which pegged the minimum capital base and cautionary deposits for intending operators at N70 million.

The guideline, which is in line with the exercise of the powers conferred on it by the Central Bank of Nigeria Act of 2007 and the Banks and Other Financial Institutions Act 2004 (BOFIA), also stipulates a non-refundable application fee of N100,000 and non-refundable licensing fee of N1 million.

The circular, which took effect on January 1, orders retail money exchanges to deposit a mandatory cautionary deposit of N35 million in an account with the CBN, in addition to a minimum capital requirement of N35 million. The CBN has been struggling to shore up the naira, hit by the plunge in oil prices which started late last year.

According to the guideline, an intending BDC operator is also to provide non-refundable annual licensing renewal fee of N 250,000 and a non-refundable change of name fee of N100,000.

The new guideline stipulated that no person shall carry on the business of BDC in Nigeria, except with the prior authorization of the CBN. It also stipulated that a BDC shall be construed as any company that is licenced to carry on small scale foreign exchange business in Nigeria and whose sole object is the carrying on of such business on a stand-alone basis. It said the application for BDC licence shall be processed in two stages, namely: approval-in-principle (AIP) and final licence.

For the AIP, a formal application to the CBN Governor to grant the promoters an AIP to carry on the business of a BDC in Nigeria is required. Also, a non-refundable application fee of N100,000 or such other amount as may be determined by the Bank from time to time in bank draft payable to the Central Bank of Nigeria.

“There also should be an evidence of payment of the prescribed minimum capital of N35 million or any other amount as may be determined by the CBN from time to time, into the designated CBN account. The bank shall refund this amount with interest after the proposed institution has obtained its final licence,” it said.

The guideline, also said that not later than six months after the grant of AIP has been secured, the promoters of a proposed BDC shall submit application for the grant of a final licence to the Governor, with evidence of payment of a non-refundable licencing fee of N1 million only, or any other amount as may be determined by the CBN from time to time among other conditions.

“There should also be evidence of payment of N35 million mandatory caution deposit, or any other amount as may be determined by the CBN from time to time, into a designated CBN account and evidence of having suitable office accommodation for the operation of the proposed BDC,” it said.

It stipulates that the qualifications and experiences of the Managing Director/CEO shall be first degree or its equivalent in any discipline with three years post-graduation while the minimum qualifications and experience shall be first degree or its equivalent in any discipline with two years post-graduation experience.

“One of the Management staff appointed above should be designated as compliance officer for the purpose of ensuring compliance with all regulatory guidelines and circulars,” it said.

It said any person/individual wishing to sell foreign currency above $10,000 or its equivalent to a BDC shall be required to disclose the source. “The maximum amount per transaction for a BDC shall be determined from time to time by the CBN with respect to business and personal travel allowances. The maximum amount currently for Personal Travel Allowance and Business Travel Allowance (BTA) per quarter is $4,000 and $5,000,respectively.


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