Effective immediately, each licensed BDC is now permitted to purchase up to $150,000 per week through authorized dealer banks.

This move aims to decentralize dollar access and drain the demand currently fueling the parallel (black) market.

The “24-Hour Rule”: Ending FX Hoarding

Unlike previous cycles where BDCs could hold onto foreign currency, the new circular signed by Dr. Musa Narkoji, director of Trade and Exchange, introduces a “Velocity Mandate.”

No Retention: BDCs are prohibited from holding FX positions sourced from the NFEM.

The 24-Hour Sell-Back: Any unutilized balances must be sold back to the market within 24 hours.

Digital Returns: All transactions must be reported electronically in real-time, moving the sector closer to a fully audited digital ledger.

Guardrails: KYC and Non-Cash Settlements

To prevent the “round-tripping” that led to the 2021 BDC ban, the CBN has imposed strict fintech-style compliance:

• Digital Settlement: Every transaction between a bank and a BDC must be settled through official bank accounts.
• Cash Capping: Cash settlements for end-users are now strictly capped at 25% of the transaction value, forcing the remaining 75% into traceable digital channels (transfers, cards, etc.).
• KYC Responsibility: Authorized dealer banks (Zenith, Access, UBA, etc.) are now legally liable for the “Know Your Customer” (KYC) integrity of their BDC clients.

The New BDC Framework at a Glance

A Win for Digital Payments?

By capping cash settlements at 25%, the CBN is effectively subsidizing the growth of cross-border payment startups.

End-users who used to buy “physical dollars” will now be pushed toward digital wallets and FX-linked cards. This framework doesn’t just manage the Naira; it builds the infrastructure for a more traceable retail FX economy.