CBN issues new guidelines for Bureau de Change Operations
The Central Bank of Nigeria has issued an updated guideline for bureau de change operations in Nigeria. The updated guidelines dated May 22 and address to Bureau De Change Operators and Stakeholders in the Financial Services Industry is titled: Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria
Amongst other things, the CBN categorised Bureau De Chnages into two: Tier 1 BDCs with a minimum capital requirement of N2 billion and can operate in any State of the federation plus the Federal Capital Territoty. The second category is the Tier 2 BDCs with a minimum capital requirement of N500 million and can operate in only one State of the fedetation
The circular further contained directives on eligible and non eligible promoters, permissible and non permissible activities, corporate governance, franchising and BDC operations. For instance, the circular effective bans commercial, merchant and non interest banks from bureau de change operations.
Through the circular, the Central Bank of Nigeria notified all stakeholders of its ban of street trading of the Naira, or, put in other words, exchanging of the Naira and bureau de change services and operations for other currencies on the streets. What this means is that it is now illegal for anyone to buy or sell the Naira for other currencies along the streets. The prohibition comes under the non permissible activities for BDCs in Nigeria
It will be recalled that the CBN had in late February 2024 revoked the operating licenses of 4,173 Bureau De Changes in the country. The announcement of the revocation of licenses for 4,173 Bureaux De Change Operators was made by the Central Bank of Nigeria (CBN). This action was taken in accordance with the powers granted to the CBN under the Bank and Other Financial Institutions Act (BOFIA) 2020, Act No. 5, and the Revised Operational Guidelines for Bureaux De Change 2015. The affected BDC operators failed to comply with various regulatory provisions, including the payment of necessary fees, rendition of returns, and adherence to CBN guidelines and directives on Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and Counter-Proliferation Financing (CPF) regulations.
The CBN has also announced earlier of its plans to revise the regulatory and supervisory guidelines for Bureau de Change operations in Nigeria. Once the revised guidelines come into effect, compliance with the new requirements will be mandatory for all stakeholders in the sector
