The Central Bank of Nigeria has introduced new guidelines limiting Bureau de Change operators to purchasing a maximum of $25,000 per week from a single authorized dealer bank.
This move is aimed at regulating the retail foreign exchange market and promoting transparency.
The directive, outlined in a circular issued on Wednesday by the Trade and Exchange Department and signed by Dr. W. J. Kanya, the acting Director of the department, is effective immediately.
The circular states that under the new rule, BDC operators must choose one authorized dealer bank per week to source their allocated forex, restricting them from acquiring funds from multiple banks.
“Authorised dealers shall sell foreign exchange cash to BDCs subject to a maximum of USD25,000.00 to a BDC per week.
“A BDC shall approach its preferred authorised dealer bank and can only procure the said amount from only that bank of its choice in a week. Any breach of this condition will attract appropriate sanction.
“The selling rate by the Authorised Dealers to BDCs shall be the prevailing day rate at the NFEM window,” the circular read.
The CBN cautioned that any BDC found in violation of this rule would be subject to appropriate sanctions.
The CBN also mandated that forex must be sold at the prevailing rate in the Nigerian Foreign Exchange Market window to maintain pricing consistency.
To prevent excessive pricing, the CBN has set a one percent cap on the margin that Bureau de Change operators can charge end-users above their purchase rate.
The restriction applies to all forex transactions conducted by BDC operators, irrespective of the source, to protect consumers from inflated charges.
The guidelines further impose stringent reporting requirements on both BDCs and authorized dealer banks.
Banks are required to submit weekly reports on forex sales to BDCs using a specified format to the CBN’s Trade and Exchange Department, while BDCs must provide daily reports on forex purchases and sales through the Financial Institutions Forex Reporting System.
Additionally, the CBN has placed further restrictions on the use of forex purchased by BDCs, limiting disbursements to specific transactions with a quarterly cap of $5,000 per end-user.
In an effort to strengthen anti-money laundering measures, the CBN has instructed BDCs to keep detailed records of all transactions, including the Bank Verification Number of end-users and an endorsement of the disbursed amount in the beneficiary’s international passport.
The bank also emphasized the importance of strict compliance with Anti-Money Laundering laws and Know Your Customer (KYC) requirements.
