By Etuka Sunday, Abuja & Ngozi Onyeakusi, Lagos
The Central Bank of Nigeria (CBN) yesterday unveiled new requirements for operation of Bureaux de Change (BDCs) in Nigeria.
This, it said, was to correct observed deficiencies in their operations in the country, which have led to gross inefficiencies and sharp practices in the foreign exchange market and has taken steps to check the growing incidence of rent-seeking, depletion of external reserves, financing of unauthorized transactions and dollarization, among others.
A statement by the Director, Corporate Communications Department, CBN, Isaac A. Okorafor gave the new guide to the operation of Bureau de Change business in Nigeria thus:
“The minimum capital requirement for the operation of BDCs in Nigeria is reviewed to N35 million;
“The mandatory cautionary deposit is reviewed to N35 million and shall be deposited in a non-interest yielding account in the CBN, upon the grant of Approval-in-Principle;
“The following fees shall apply to the licensing of BDCs: Application Fee -N100,000.00; Licensing Fee – N1 million; and Annual Renewal Fee -N250,000.00.
“Ownership of multiple BDCs is not permissible, and would be punishable if detected.
“Existing BDCs and those currently operating with a Final Approval Letter are required to comply with the requirement on mandatory cautionary deposit by 15 July 2014 while all current applications are expected to comply with these new requirements.
“Furthermore, the compulsory membership of the Association of Bureau De Change Operators of Nigeria (ABCON) is no longer a requirement for the licensing of BDCs.
The statement said the review was to ensure that only genuine companies operate as BDCs in Nigeria. It further said the objectives of regulating BDC operations in Nigeria was to provide access to foreign exchange to small-scale end-users; serve as tools for the management of exchange rate; Assist in the fight against illegal financial activities; Facilitate economic activities; and Provide economic data for policy decisions.
However, it said it has observed with grave concern the deficiencies in the operational effectiveness of BDCs, which runs counter to the afore-mentioned objectives.