Aduragbemi Omiyale
By Aduragbemi Omiyale
The operational licences of all the Bureaux De Change (BDC) operators in the country have been revoked by the Central Bank of Nigeria (CBN).
Foreign exchange (FX) traders in the parallel market have now been asked to reapply for a new licence if they intend to continue with the business of exchanging currencies for FX users.
In a circular issued on Wednesday, the central bank explained that it took the action to cancel the licences of the BDC operators as part of reforms to reposition the sub-sector and in the exercise of its powers as contained in Section 58 of the Banks and Other Financial Institutions Act (BOFIA) 2020.
The new licences will have different categories and requirements to be met by applicants, the notice signed by the Director of Financial Policy and Regulation Department, Mr Haruna Mustafa, stated.
Because of this, the CBN said operators must reapply for a new licence according to any of the tiers or licence categories of their choice provided in the guidelines.
It emphasised that they must meet the minimum capital requirements for the license category within six months from the effective date of the guidelines, Monday, June 3, 2024.
The CBN said the tier 1 licence applicant may operate in any state of the federation and the Federal Capital Territory (FCT), but must maintain a minimum distance of one kilometre between its branches.
However, the tier 2 operator is only permitted to operate in one state of the federation or the FCT and can only establish five branches in a state of operation, subject to the written approval of the CBN.
But both licence holders are not allowed to engage in street trading of foreign currencies, and must not permitted to take deposits from or grant loans to members of the public in any currency and any form.
BDC operators have been prohibited from opening or maintaining any account with any bank or financial institution outside Nigeria without the prior written approval of the CBN, and cannot act as custodians of foreign currency on behalf of customers.
They are only allowed to obtain foreign exchange (FX) from tourists, returnees from the diaspora, expatriates with foreign exchange inflows, residents with foreign exchange inflows, International Money Transfer Operators (IMTOs), the Nigerian Foreign Exchange Market (NAFEM), hotels that are authorised buyers of foreign currencies, and embassies.
