The Bureau De Change operators in the country have yet to comply with the new guidelines for their operations, which were announced by the Central Bank of Nigeria three weeks ago.
The President Association of Bureau De Change Operators of Nigeria, Aminu Gwadebe, said that BDCs’ noncompliance was caused by a lack of clarity in the central bank’s guidelines, according to The Punch.
Gwadebe stated that correspondence to the CBN requesting clarification on the execution of the rules had not been responded to.
He said “We don’t have clarity. For the existing BDCs, what we expect the CBN to do is tell them to come and recapitalise but what is happening is that they should go and re-apply.
“What we would like to know is if the existing licences were withdrawn or revoked. If you are telling me to reapply, is it the same as asking me to recapitalise and this reapplying involves me going to the CAC, getting a name, etc.? It feels like an entirely new process, which for us is against any recapitalisation plan. The entire thing is like a new process so we need to know.”
In the new CBN operational guidelines for BDCs issued in May and effective June 3, the apex bank directed all existing BDCs to re-apply for a new licence under their preferred categories (Tier 1 and Tier 2 BDCs) and meet the minimum capital requirement of the licence category applied for within six months of the guidelines’ effective date.
According to the criteria, BDCs with Tier 1 licences are anticipated to have a capital base of N2 billion, while Tier 2 licensees must have N500 million, with non-refundable licence fees of N5 million and N2 million.
Gwadebe, on the other hand, noted that the central bank has ceased supply to BDCs since March and was working toward total liberalization of the foreign currency market, which would not require its intervention.
He said, “The BDC window has been suspended by the Central Bank of Nigeria since around March or so. The last time we were funded I think was around March.
“Our business model was to be funded by the CBN and that is what we have been working with from 2006 till date. That is where most people were making their living and with the new financial requirement, they have made it unattainable for most of our members.
“First of all, I don’t know how many can attempt to meet the N2bn and N500m deposits. Secondly, if they do, what of the profitability of the business? Thirdly, there is no policy consistency.”
“You might say, you want to source money from partners abroad but the perception of our policy inconsistency is a big minus. There is no guarantee that in the next one or two years, the policy will even remain. These are some of the challenges surrounding the new regulations,” he lamented.
Gwadebe complained that receiving feedback from the CBN had recently become harder.
“There is a need for clarity and there appears to be a lot of reorganisation taking place there. So, communication is broken, and getting clarification is hard. The CBN is mute or muted as far as I’m concerned,” he noted.
Efforts to contact the CBN’s acting Director of Corporate Communications, Sidi Ali, have proven futile as of the time of reporting this story, with calls to her line going unanswered and text messages and WhatsApp messages not being returned.
Meanwhile, on whether the BDCs were complying, the source, who pleaded anonymity said it was still early days for compliance.
“There is no rush now but they still don’t have any choice but to adhere to the guidelines,” the source noted.
According to the source, if the CBN stops selling FX to BDCs, they will be officially notified.
