The Central Bank of Nigeria (CBN) has introduced a fresh guidelines to keep Bureau De Change (BDCs) in check.
With the latest guidelines BDCs in the Tier 1 category must have a capital requirement of N2 billion, while Tier 2 BDCs must have a capital requirement of N500 million.
Previously, Tier 1 BDCs’ license fees was N15m.
The change represents a 13,233.33 percent hike.
The development is aimed at addressing at the prevailing foreign exchange crisis rocking the country.
In a detail of the fresh guidelines, the Financial Policy and Regulation Department of the apex bank headed by Haruna B Mustafa said banks, government agencies, and NGOs are disallowed from having ownership stakes in BDCs.
Also, BDCs are restricted to buying and selling foreign currencies, issuing prepaid cards, and acting as cash points for money transfer operators, and are not allowed to take deposits, grant loans, deal in gold, or engage in capital market activities.
On sourcing foreign currencies? BDCs can obtain forex from authorized dealers, travelers, hotels, embassies, and other sources. For large transactions exceeding $10,000, a declaration of the source is required.
Regarding the sale of foreign currencies, BDCs can sell forex for purposes such as travel, medical bills, and school fees, up to specified limits per customer annually. At least 75 percent of the sales must be conducted through electronic transfers, while the remaining 25 percent can be in cash.
There are two tiers of BDCs: Tier 1, which has a national presence with branches and franchises, and Tier 2, which is limited to operating in one state with a maximum of three locations.
BDCs are required to verify the identity of their customers, maintain transaction records, connect to CBN systems, and display rates clearly. They must also submit specified regulatory returns, make their records available for inspection, and comply with the guidelines.
The guidelines also outline standards for Tier 1 BDCs that appoint franchises, covering areas such as policy, monitoring, and branding. Prudential requirements are set for BDCs, including limits on open positions, fixed assets, borrowings, and dividend payments. Additionally, BDCs must comply with anti-money laundering and countering the financing of terrorism regulations, with regard to policies, monitoring, and reporting.
