CBN revokes licences of 766 BDCs

A total of 766 Bureaux De Change have lost their operating licences and will no longer be funded by the Central Bank of Nigeria during its twice-weekly sale of dollars.

The 766 BDCs lost their licences for failing to meet the July 31, 2014 recapitaisation deadline set by the CBN.

The CBN had, in a bid to reposition the foreign exchange market, in June released new capitalisation guidelines for the BDCs in the country.

In the guidelines, the central bank had 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.

In a new circular posted on its website on Friday, the central bank released a list of 2,442 BDCs that met the new recapitalisation guidelines.

By the development, 766 out of the total 3,208 BDCs registered by the CBN have lost their licences.

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 had clashed with the CBN over the introduction of the new guidelines.

The Governor of the CBN, Mr. Godwin Emefiele, had, however, said the implementation of the guidelines would help to stem the depletion of the country’s foreign reserves from unproductive transactions.

However, the Acting National President, Association of Bureau de Change Operators of Nigeria, Alhaji Aminu Gwadabe, argued that dollar sales to the BDCs were not responsible for the depletion of the external reserves, saying the amount sold to the sub-sector was negligible.