CBN Replies As ABCON Fumes Over Directive on BDC Operators To Apply for New Licences
- The CBN has mandated all Bureau De Change (BDC) operators to reapply for new licences and also raised minimum capital requirements
- The apex bank said the move is part of efforts to enhance transparency and combat illicit financial activities
- In a chat with Legit.ng, Alhaji Aminu Gwadabe, president of ABCON, reacted to the apex bank's decision
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends
The Association of Bureaux De Change Operators of Nigeria (ABCON) has expressed concerns about the Central Bank of Nigeria (CBN) directive requiring all Bureaux De Change (BDC) operators to reapply for new licences.
Source: Getty Images
Legit.ng reported that the CBN gave the directive in a circular issued by its director of financial policy and regulation department, Haruna Mustafa, on Wednesday, May 22, 2024.
In the circular, the CBN also instructed the BDCs to meet the capital requirements for their licence category within six months.
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ABCON reacts to CBN directives
Reacting to the development, Aminu Gwadabe, president of ABCON, stated that the requirements are huge.
Punch reports that Gwadabe stressed that the new requirements are not in line with global practices.
His words:
"Capitalisation in the UK is 50,000 pounds; in Kenya, it is $50,000 and so on. I don’t think it reflects global practice. A BDC is not a deposit taker; it is only buying and selling.
"When you are giving other sectors, one year, or two years, why the rush with the sub-sector? The deadline is quite short. It is not feasible and then we should also guide against what we are trying to avoid.
" The CBN in its mind is checkmating money laundering and we may meet money laundering in the future.”
Speaking further in a chat with Legit.ng, the ABCON president added that the association is working on the appropriate response.
He said:
"We are studying the documents to come up with an industry response. It is the role of the CBN to make a policy and our role is to cast a doubt."
Some new requirements for BDCs
Meanwhile, Sidi Ali Hakama, the CBN's acting director of the corporate communications department, has explained the new guidelines aim to ensure BDCs play a more significant and positive role in Nigeria’s foreign exchange market.
Hakama added that the six-month grace period allows them to adjust their operations to meet the new standards.
New platforms identified as threats to naira
Earlier, Legit.ng reported that Nigerians identified the emergence of two cryptocurrency platforms as the reason for the recent fall of the naira.
The initial decline of the naira was attributed to alleged market manipulation by Binance.
Nigerians have blamed the latest depreciation on new crypto exchange platforms, namely BYBIT and BITGET.
Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
