From Ngozi Onyeakusi, Lagos
Association of Bureaux De Change Operators of Nigeria (ABCON) has proposed a 40 week time table for bureaux de change operators to meet the N35 million new minimum capital requirements.
On June 23rd the Central Bank of Nigeria (CBN) raised the minimum capital requirement of BDCs to N35 million from N10. It also raised the mandatory caution deposit to N35 million from $10,000. On July 7th, the apex bank extended the deadline from July 15 to July 31st, in response to appeals and intervention of ABCON and both chambers of the National Assembly.
Speaking to Journalists on the latest development, ABCON President, Alhaji Aminu Gwadabe said that the Association has proposed a 40 week timetable for BDCs to meet the new minimum requirement, adding that the proposal has been sent to the CBN Governor for consideration.
He said, though the apex bank has extended the deadline by three weeks to July 31st, the time is still too short to enable BDCs comply with the statutory and legal requirements of the new policy. The timetable, he said, contains actions needed to be taken to enhance the successful implementation of the CBN policy for the subsector.
According to Gwadabe, “The timetable starts with sensitisation seminars to educate members on various options to consider in meeting the minimum capital requirement. We plan to hold these seminars in each geopolitical zone of the federation. Moreover, we would assist members scout for consultants to guide them on issues of valuation of existing companies in order to accommodate new members and or achieve harmonious merger. This is in line with what the CBN did for banks during the recapitalisation exercise of 2004”.
He said that in addition to the 40 week timetable, the Association has also appealed to the CBN to take a critical look at the minimum capital requirement of N35 million and the requirement of N35 million as caution deposit, because both requirement implies that the apex bank has raised the minimum capital base of BDCs to N70 million, since the N35 million caution deposit would not be immediately refunded once it is deposited.
“Consequently, we have appealed to the CBN Governor to allow the minimum capital base to be at N35 million and the caution deposit at N5 million so as to source the caution deposit from the capital baseof the company and the balance of N30 million be used as working capital of the BDCs.
“We have also appealed to the CBN to consider paying treasury bills interest rates on caution deposit to the BDCs, and because of volatility of the rate, an annual average rate could be used when crediting the interest due on the caution deposits.
Also, in cognisance of the fact that all BDCs may not be able to either secure merging partners, source for new investors and or raise money internally to meet the capital require, we have recommended that CBN allow BDCs with N10 million capital to continue to exist but may be denied access to the weekly CBN dollar sales. This means they can trade but would not be allowed to buy dollars from CBN”. ABCON last week kicked against the amendments to the new requirements for BDC operations, saying it is an indirect attempt to empower few operators in the sub-sector and consequently force many of the BDC operators into liquidation.