Just In : CBN orders existing BDCs to reapply for new license
Sets 6mth deadline for compliance with new minimum capital
The Central Bank of Nigeria, CBN yesterday released new operational guidelines for Bureau De Change, BDCs, and directing existing operators to reapply for new licenses and six six-month deadlines to meet the new minimum capital requirements.
People Talk: On sale of new Naira notes at Nigerian parties0.00 / 0.00
The new guidelines introduce two categories of BDCs, Tier 1 and Tier 2, with minimum capital requirements of N2 billion and N500 million respectively.
The new guidelines were released yesterday via a circular to all BDC operators and stakeholders in the financial services industry.
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.
Titled, “Regulatory and Supervisory Guidelines for BDC Operation in Nigeria”, the circular was signed by the Director, Financial Policy and Regulation Department, Haruna Mustafa.
The circular stated: “As part of reforms to re-position the Bureau De Change (BDC) sub-sector to play its envisioned role in the foreign exchange market in Nigeria, the Central Bank of Nigeria (CBN) issued the Draft Operational Guidelines for BDC Operations in Nigeria in February 2024, for stakeholder comments/inputs.
“Following the conclusion of the stakeholder consultations and in the exercise of the powers conferred on it by Section 56 of the Banks and Other Financial Institutions Act (BOFIA) 2020, the CBN hereby issues the attached Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria 2024 for compliance by all operators and promoters of proposed BDCs in Nigeria.
“The Guidelines, amongst others, introduce new licensing requirements and categories of BDCs as well as revise the permissible activities, financial requirements, corporate governance requirements and AMUCFT/CPF provisions for BDCs.
“All existing BDCs shall; Re-apply for a new license according to any of the Tiers or license category of their choice as provided in the Guidelines;
Meet the minimum capital requirements for the license category applied for within six (6) months from the effective date of the Guidelines.”