CBN Removes List of Approved BDCs, Clarifies New Licensing Guidelines

CBN Removes List of Approved BDCs, Clarifies New Licensing Guidelines

  • The Central Bank of Nigeria (CBN) has removed the list of the names of approved Bureau de Change (BDC) operators from its website
  • The bank had always displayed the list of approved BDCs on its website to guide currency buyers
  • The development comes as CBN issued new rules for BDC operators and asked them to re-apply for licenses

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.

The Central Bank of Nigeria has removed the list of approved Bureaux de Change (BDC) operators from its website following a new directive requiring BDCs to re-apply for operational licenses.

CBN clarifies position on new BDC rule
Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso Credit: CBN
Source: Facebook

CBN discloses reason for new guidelines

Checks by Legit.ng show that the bank usually displays the list on its website so the public knows authentic currency dealers across Nigeria has been removed.

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The development comes as the bank clarified the tier-based classification of BDCs, saying that the new rule followed an earlier circular for public input this year, which it has now incorporated and posted on its site on Wednesday, May 22, 2024.

The bank’s acting director of the corporate communications department, Hakama Sidi Ali, clarified this as he spoke with reporters in Abuja on Thursday, May 23, 2024.

She disclosed that new guidelines include two licensing tiers.

Reports say Sidi Ali repeated CBN’s invitation to interested parties to apply for BDC licenses effective June 3, 2024, while existing operators have six months to renew their licenses after meeting the guidelines.

CBN revokes licenses of BDCs

Legit.ng earlier reported that the CBN has asked all existing Bureau de Change (BDC) operators in Nigeria to re-apply for new operational guidelines,

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The bank stated this on Wednesday, May 22, 2024, in a document titled Regulatory and Supervisory Guidelines for Bureau de Change Operations in Nigeria.

According to the apex bank, all existing BDCs shall re-apply for a new license by any of their chosen tiers or license categories, as provided in the Guidelines.

The apex bank disclosed that BDCs must meet the minimum capital requirements for the license category applied for in six months starting June 3, 2024.

CBN said:

“All existing BDCs shall meet the minimum capital requirements for the license category applied for within six (6) months from the effective date of the guidelines.”

The release said that the minimum capital requirement for tier 1 BDC operators is N2 billion while N500 million is required for tier 2 BDCs.

CBN gives new deadline for new requirements

According to the requirements, the tier BDC operators must pay a non-refundable application fee of N1 million and a non-refundable license fee of N5 million.

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The bank expects tier 2 operators to pay a non-refundable application and license fee of N250,000 and N2 million, respectively.

Per the circular, the new guidelines supersede the Revised Operational Guidelines for Bureau De Change in Nigeria issued in November 2015 and all related circulars and directives.

“The Guidelines take effect from June 3, 2024,” the statements said.

The CBN began selling forex weekly to BDCs in March to ease the liquidity crunch in the foreign exchange market.

Analysts blame naira's crash forex scarcity

The bank sold $10,000 to each BDC at a specific rate, asking them to sell at most 1.5%.

The development follows the crash of the Nigerian currency in the FX market in late April.

The naira emerged as the best-performing currency in April, exchanging for almost N1,000 per dollar before crashing again as a liquidity squeeze set in.

Analysts believe that the CBN's lack of intervention in the FX market is to blame for the naira's fall.

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They say that CBN ought to have continued selling FX to the operators to ease the system's crunch.

CBN explains naira depreciation against the US dollar

Legit.ng earlier reported that the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) had cited increased seasonal demand for foreign exchange as the reason for the naira's depreciation.

The CBN governor, Yemi Cardoso, disclosed this while speaking on behalf of the committee at the end of the MPC's two-day meeting held on Monday, May 20, and Tuesday, May 21, 2024.

According to Cardoso, the CBN remained committed to ensuring the market determines the exchange rate through a willing-seller model, and what is happening reflects that.

Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng

Source: Legit.ng

Authors:
Pascal Oparada avatar

Pascal Oparada (Business editor) Pascal Oparada is a Mass Communications Graduate from Yaba College of Technology with over 10 years of experience in journalism. He has worked in reputable media organizations such as Daily Independent, TheNiche newspaper, and the Nigerian Xpress. He is a 2018 PwC Media Excellence Award winner. Email:pascal.oparada@corp.legit.ng

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