THE Central Bank of Nigeria (CBN) has warned banks, non-governmental organisations, and government agencies not to have a stake or invest in (Bureau De Change) Operations.
The Financial Policy and Regulation Department of the Apex Bank warned against such investment in a new set of guidelines to all BDC operators and stakeholders in the financial sectors.
The guidelines were released on Friday, February 23.
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The guidelines warned that entities like banks, government agencies, and NGOs are not allowed ownership stakes in BDCs.
The apex bank said this new set of guidelines would enable it to monitor speculative activities currently confronting Nigeria’s foreign exchange market and the downward spiral of the naira.
Currently, the naira is going through its worst phase, leading to inflation and the high cost of food items in the country.
Already, the National Security Adviser, Nuhu Ribadu, had ordered the Economic and Financial Crimes Commission (EFCC), Department of State Services (DSS), and other security agencies to crack down on currency speculators in the forex market.
This resulted in raids on BDCs nationwide and the arrest of some illegal operators.
According to the guidelines, the capital required for the license of BDCs in the Tier 1 category is N2 billion, while that of Tier 2 is N500 million.
Tier 1 category of BDC are those with a national presence, branches, and franchises; while Tier 2 is restricted to 1 state with a maximum of three locations.
The guidelines also stated that BDCs could source forex from authorised dealers, travellers, hotels, and embassies. It further noted that Large transactions above $10,000 require the declaration of the source.
“BDCs can sell forex for travel, medical bills, and school fees, up to specified limits per customer annually. At least 75per cent of sales must be via transfer, 25per cent can be cash,” it added.
It further said that BDCs can buy and sell foreign currencies, issue prepaid cards, serve as cash points for money transfer operators, etc. They cannot take deposits, grant loans, deal in gold, or engage in capital market activities.
The directive further warned that BDCs must verify customer identity, keep transaction records, connect to CBN systems, and display rates.
It further specified that regulatory returns must be rendered, records must be available for inspection, and compliance with guidelines is required.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.