CBN Releases Regulatory And Supervisory Guidelines For Bureau De Change Operations In Nigeria
By Emmanuel Uffot
In line with the Central Bank of Nigeria ( CBN) strive to strengthen and regulate the operations of Bureau De Change ( BDCs) in Nigeria, it has released guidelines to regulate and supervise the foreign exchange parallel market operators.
Under the revised guidelines which revolves around, governance, licensing, sources of funds, supervision and foreign exchange transactions,
Certain entities like banks, government agencies Non- governmental organisations (NGOs )are not allowed to have ownership stake in BDCs.
– BDCs can buy and sell foreign currencies, issue prepaid cards, serve as cash points for money transfer operators among others. However, they cannot take deposits, grant loans, deal in gold or engage in capital market activities.
– Sources of Foreign Currencies: BDCs can source forex from authorized dealers, travellers, hotels, embassies etc. Large transactions above $10,000 require declaration of source.
-Sale of Foreign Currencies: BDCs can sell forex for travel, medical bills, school fees etc up to specified limits per customer annually. At least 75% of sale must be via transfer, 25% can be cash.
– Under the newly revised guidelines on categories of BDCs. There are 2 tiers of BDCs, and whereas Tier 1 has national presence, branches and franchises; Tier 2 are restricted to one state with maximum of three locations.
On financial Requirements: Minimum capital of N2 billion for Tier 1 and N500 million for Tier 2. Other fees and deposits specified.
-Licensing Process: Two stage process – Approval in Principle and Final Licence, each with specified document requirements.
– For Corporate Governance: Board composition, assessment of propriety, fitness requirements for directors and senior management specified.
-Operations: BDCs are reguired to as a matter of compulsion verify customer identity, keep transaction records, connect to CBN systems, display rates clearly among others.
On Supervision: Specified regulatory returns must be rendered, records available for inspection, compliance with guidelines required.
Also on Franchising Standards: Standards specified for Tier 1 BDCs include appointing franchises regarding policy, monitoring and branding.
Prudential Requirements: This specified limits on open position, fixed assets, borrowings and dividend payment.
On AML/CFT Requirements: The guidelines stipulates that all BDCs operating in the country must comply with AML/CFT regulations on policies, monitoring and reporting
One of the key guidelines of the CBN on Bureau De Change operators is penalties for flouting the guidelines. Accordingly, non-compliance may lead to sanctions including revocation of license.
Sources revealed that the new guidelines may not be unconnected with the free fall of Naira against United States dollars in particular.
The CBN guidelines for BDCs is coming on the heels of the confirmation of CBN Governor Olayemi Cardoso alongside 12 management team by the senate.
Their confirmation last week followed the presentation of their names earlier to the upper chambers by President Bola Tinubu seeking their confirmation.
