All existing Bureau De Change Operators have been mandated by the Central Bank of Nigeria to re-apply for new licenses in their preferred category.
This was announced on Wednesday in a circular issued by the apex bank, which was signed by Haruna Mustafa, the director of the Financial Policy and Regulation Department.
The CBN noted that those adjustments aimed to streamline BDC operations and enhance financial accessibility.
The apex bank noted that the BDCs were expected to adhere to corporate governance requirements and anti-money laundering, counter-terrorism financing, and counter-proliferation financing provisions.
The latest circular comes a day after the Monetary Policy Committee of the apex bank raised the benchmark lending rate to 26.25 per cent to tackle the country’s soaring inflation.
Reading the communiqué of the meeting, Olayemi Cardoso, the Governor of the CBN, said,
“Members further observed the recent volatility in the foreign exchange market, attributing this seasonal demand, a reflection of the interplay between demand and supply freely functioning market system.”
The naira has depreciated significantly since the CBN unified the country’s exchange rates, trading between 1,400/$ and 1,600/$ at the official and parallel markets in the last two weeks.
The new guidelines, which are an update on the draft that was exposed earlier in the year, go into effect on June 3.
The CBN removed the mandatory caution deposit, which the industry players had kicked against.
CBN set up two new categories; Tier 1 and Tier 2 BDC licences
According to the new guidelines, A Tier 1 BDC:
- May operate in any State of the Federation and the Federal Capital Territory,
- May establish branches and appoint franchisees in any state and FCT, subject to the written approval of the CBN.
- Shall maintain a minimum distance of one kilometre between its branches, its branch and a franchisee, and between its franchisees.
- Shall exercise oversight on its franchisees. All franchisees shall adopt their franchisor’s name, logo, branding, technology platform and regulatory rendition requirements.
2 Classified as Confidential: e. Shall comply with the franchising standards prescribed in this guidelines.
A tier 2 BDC Licence allows the operator to operate from only one state of the federation or the FCT, and it is allowed to establish five branches in a state of operation, subject to the written approval of the CBN.
It is also required to maintain a minimum distance of one kilometre between its branches and is not allowed to appoint franchisees.
The BDCs (existing or new) would also be required to meet the capital requirements for their license category within six months.
