The Central Bank of Nigeria, CBN, Monday, released fresh guidelines for Bureau De Change operators to check depletion in the country’s external reserves. This was contained in a statement issued by the Director, Corporate Communications Department of the apex bank, Mr Isaac Okoroafor. As contained in the statement, CBN has given all BDC operators in the country till July 15 to raise their capital from the current N10m to N35m, adding that the amount must be deposited in a non-interest yielding account in the CBN subject to a grant of approval-in-principle more so, the statement said that all BDCs applying for the new license would be expected to make an application fee of N100,000, licensing fee of N1m and an annual renewal fee of N250,000.“In order to ensure that only genuine companies operate as BDCs in Nigeria, the CBN makes the following modifications to the BDC guidelines.“The minimum actual requirement for the operation of BDCs in Nigeria is reviewed to N35m.“The mandatory cautionary deposit is reviewed to N35m and shall be deposited in a non interest yielding account in the CBN upon the grant of Approval-in-Principle“The following fees shall apply to the licensing of BDCs: Application fee-N100,000; licensing fee N1m; and annual renewal fee-N250,000.“Ownership of multiple BDCs is not permissible and would be punished if detected.“All existing BDCs and those currently operating with a final approval letter are required to comply with the requirement on mandatory cautionary deposit by July 15, 2014 while all current applications are expected to comply with these new requirements,” the statement explained. It further stated that the compulsory membership of the Association of Bureau De Change Operators of Nigeria would no longer become a requirement for licensing of BDCs. It explained that while the BDCs were licensed to provide foreign exchange access to small scale end uses and assist in the fight against illegal financial activities, the apex bank had observed a weak and ineffective operational structure which had made the sector to abandon the objectives for its establishment. The statement noted that going forward, the expected role of BDCs following their recapitalization would be to deliver superior values and returns to the foreign exchange market.“The CBN’s expectation is to have BDCc that are properly structured, effectively regulated, and well capitalized to meet the objectives for which operators are licensed.
“In particular, the CBN envisages partnership between BDCs and renowned companies engaged in inward and outward money transfers in Nigeria, creation of robust and sustainable business franchises that are not dependent on rent seeking activities but are properly situated to compete in the foreign exchange market,” the statement said.It also listed inadequate minimums in paid-upcapital, prevailing ownership of several BDCs by same promoters in order to buy foreign exchange multiple times from the CBN window as well as their huge interest in widening margins and profits from the foreignexchange market as some of the deficiencies of the system