The Central Bank of Nigeria (CBN) has announced significant updates to the regulatory guidelines for Bureau De Change (BDC) operators, marking a pivotal shift in the landscape of foreign exchange regulation. This development, resulting from extensive stakeholder consultations, aims to enhance the operational efficiency and financial inclusivity of the sector.
Key among the changes is the removal of the mandatory caution deposit for BDC license holders. Tier-1 BDC licensees, previously required to deposit N200 million, and Tier-2 licensees, who deposited N50 million, will no longer bear this financial burden. Additionally, the CBN has withdrawn the non-refundable annual license renewal fee, which stood at N5 million for Tier-1 and N1 million for Tier-2 BDCs.
Haruna Mustafa, Director of the Financial Policy and Regulation Department at the CBN, highlighted the bank’s commitment to streamlining BDC operations through these regulatory adjustments. As disclosed in a circular on the bank’s website, the revisions are designed to foster a more agile and accessible foreign exchange market.
Under the new framework, both existing and prospective BDC operators are required to reapply for licenses that align with their operational scale and preferences. The guidelines stipulate that existing operators must align with the minimum capital requirements for their selected license category within a six-month timeframe from the guidelines’ effective date.
Additionally, the guidelines introduce revisions to the permissible activities for BDCs, ensuring they align with current market needs and regulatory standards. Mustafa emphasized the importance of adherence to corporate governance principles and compliance with anti-money laundering (AML), counter-terrorism financing (CTF), and counter-proliferation financing (CPF) requirements.
The process for license application and renewal has been streamlined, with interested parties directed to submit their applications electronically from the effective date of the guidelines. This move towards digital submissions aims to enhance efficiency and reduce administrative hurdles for applicants.
These updated guidelines, set to replace the Revised Operational Guidelines for Bureau De Change in Nigeria issued in November 2015, are indicative of the CBN’s efforts to recalibrate the BDC sub-sector. By introducing new licensing requirements and categories, as well as revising financial and operational standards, the CBN is poised to reposition BDCs as pivotal players in Nigeria’s foreign exchange market. The Regulatory and Supervisory Guidelines for BDC Operations are scheduled to take effect from June 3, 2024, marking a new era in the regulation of foreign exchange operations in Nigeria.
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Last modified: May 23, 2024
