CBN revokes licences of 766 BDCs

The Central Bank of Nigeria has revoked the operating licences of 766 Bureaux De Change and will no longer allow them participate in its twice-weekly sale of dollars.
The bank in a circular posted on its website on Friday announced the names of 2,442 BDCs that met the new recapitalisation guidelines.
The CBN had in June released new capitalisation guidelines for the BDCs in the country, as part of effort to plug leakages in the sale of forex through its official window.
The 766 BDCs failed to meet the July 31, 2014 recapitaisation deadline set by the CBN.
The CBN in the June guidelines increased the capital base for the BDCs from N10m to N35m, and asked them to make a caution deposit of N35m, among other requirements.
In a circular dated July 7, 2014, the Director, Financial Policy and Regulation, CBN, Mr. Kelvin Amugo, had said the BDCs that failed to meet the new guidelines by July 31 would cease to be recognised and funded by the central bank.
As a result of the new circular, 766 out of the total 3,208 BDCs registered by the CBN cease to be recognize as such by the CBN.
Amugo also said that all the BDCs that met the requirement would be engaged as agents by licensed international money transfer operators for inbound and outbound money transfer business in Nigeria.
In addition to those already registered, the central bank has applications from 1,417 prospective bureaus de changes awaiting its approval.
This means that additional 1,417 prospective failed to meet the deadline.
The CBN officials had said that if the central bank had granted them the licences, the country would have 4,625 licensed BDCs operating in the country to which the central bank must sell $50,000 on a weekly basis.
This, they said, would raise the CBN’s funding of the BDCs to $12bn per annum. This, they noted, would provide an avenue for the depletion of the nation’s foreign reserves.
The BDC operators’ association have opposed the new policy and made moves under the new dispensation at the CBN to upturned the policy.
But they failed in their bid when the Governor of the CBN, Mr. Godwin Emefiele, reaffirmed the commitment of the apex bank to the implementation of the guidelines.
Emefiele said it would help to stem the depletion of the country’s foreign reserves from unproductive transactions.