The Central Bank of Nigeria (CBN) has made a clarification on the reported revocation of licenses of Bureau De Change (BDCs).
It was reported earlier that in the updated regulatory guidelines for BDC operations in Nigeria, the mandatory caution deposit of N200m for tier-1 BDC licence holders has been removed. Similarly, N50m for tier-2 licence holders has also been removed.
The non-refundable annual licence renewal fee has been withdrawn. Previously, tier-1 BDCs paid N5m, while tier-2 BDCs paid N1m for renewal.
The new guidelines introduce two categories of BDCs, Tier 1 and Tier 2, with minimum capital requirements of N2 billion and N500 million respectively. Furthermore, the bank set the application fee for Tier-1 license at N1 million and that of Tier-2 at N250 thousand. The licensing fees for Tier-1 and Tier-2 BDCs were set at N5 million and N2 million respectively.
Among other things, the new guidelines limited the foreign currency holdings of BDCs (Net Open Position, NOP) to 30 per cent of shareholders’ funds unimpaired by losses. It also limited total borrowing to 50 per cent of shareholders’ funds unimpaired by losses.
The apex bank also asked BDCS to meet the requirements of the Tier of license they are applying for within the next six months.
Making a clarification on this, the apex bank said the tier-based classification of Bureau De Change (BDCs) followed an earlier exposure draft circulated for public input earlier this year, which the Bank has now incorporated and posted on its website on Wednesday, May 22, 2024.
Hakama Sidi Ali, acting director of the corporate communications department, who spoke to reporters in Abuja on Thursday, May 23, 2024, said the new guidelines include two tiers of licencing.
She reiterated the Bank’s invitation to interested parties to apply for BDC licences, provided they meet the new guidelines, effective June 3, 2024, while existing BDCs will have a six-month grace period to meet the new requirements.
Sidi Ali also said the CBN remains committed to repositioning the BDC sub-sector to play its envisioned role in the foreign exchange market in Nigeria.
Share this story to friends