CBN Imposes New Capital Requirement on Currency Traders in Nigeria, Limits FX Cash Purchases
- The Central Bank of Nigeria has increased the minimum capital requirements for BDC operators in Nigeria
- The apex bank said Tier-1 BDC operators must maintain a minimum capital of N2 billion, while Tier-2 operators must have N500 million
- The bank is also reportedly considering banning street trading of Forex and limiting FX cash payments to $500
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The Central Bank of Nigeria (CBN) has proposed new regulations to increase Nigeria's minimum requirements for Bureau de Change (BDC) operators to N2 billion and N500 million for Tier 1 and Tier 2 licences.
The latest development changes from the previous requirement of N35 million for a general license.
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CBN to determine the new date for new guideline
The new directive is in the Exposure draft in the Revised Regulatory Supervisory Guidelines for Bureau De Change operations in Nigeria.
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CBN said:
"The Guidelines revise the permissible activities and licensing requirements, corporate governance and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CT) provisions for BDCs. It also sets out new record-keeping and reporting requirements, among others," the publication said.
According to the new regulations released by the apex bank, the updated regulations disclosed that once approved, the guidelines will come into effect on a date determined by the CBN.
The new guidelines require that Tier 1 operators maintain a minimum share capital of N2 billion and also submit a Mandatory Caution Deposit of N200 million, with an application fee of N1 million, while the license fee is N5 million.
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New guidelines for Tier-1 and Tier-2 operators
Tier-1 operators must maintain a minimum share capital of N2 billion and submit a Mandatory Caution Deposit of N200 million.
Tier-1 operators are authorised to operate nationally, can open branches, and may appoint franchisees based on the CBN's approval.
A Tier-1 operator shall exercise supervisory oversight over its franchisees, with all franchisees adopting their franchisor's name, branding, technology platform and rendition requirements.
Tier-2 operators must possess a minimum share capital of N500 million and maintain a Mandatory deposit of N50 million.
The application fee for Tier-2 operators is N250,000, while the license fee is N2 million.
The apex bank also disclosed that the CBN will confirm the minimum capital requirements for BDCs, including any additional capital infusion.
The BDC licenses are renewable annually, subject to compliance with extant laws and regulations applicable to their operations.
CBN to bank Forex street trading and limits cash purchase
In a related development, the apex bank is reportedly considering banning BDC operators from street trading and limiting cash transfer payments for selling Forex to a minimum of $500.
The guideline also includes the acquisition of Forex from approved sources and sales of FX in line with its policies, which serve as a cashout point for IMTOs.
The bank said the operators transacting $10,000 and above must declare their sources.
"Payments to customers for cash purchases of foreign currency, the equivalent of above USD500, shall be by transfer to the customer's Naira bank account. A BDC shall issue the customer a prepaid NGN card if the customer is a non-resident (whether Nigerian or not). Where such a card is issued, relevant maximum credit and cumulative limits, in line with relevant Know Your Customer requirements, shall apply."
EFCC arrests 115 BDC operators
Legit.ng reported that amid the fluctuation of the naira, the Economic and Financial Crimes Commission (EFCC), in conjunction with a Joint Task Force and the Nigeria Police Force (NPF), and three teams from the Nigeria Customs Service (NCS), arrested 115 suspected currency racketeers in Enugu state.
The Enugu state command of the anti-graft agency made this known on Thursday, February 22, in a post shared on its X account.
The operation, carried out on Wednesday, February 21, 2024, targeted individuals involved in illegal foreign exchange activities, including bureau de change operators, currency speculators, and street hawkers in the Owerri Road area of Ogui, Enugu state.
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Source: Legit.ng
