The Central Bank of Nigeria has unveiled new guidelines for Bureau De Change in an effort to address the ongoing foreign exchange challenges in the country.
The regulations include a significant increase in license fees for Tier 1 BDCs from N15 million to a capital requirement of N2 billion, reflecting a 13,233.33 per cent hike.
The Financial Policy and Regulation Department of the CBN, led by Haruna B Mustafa, outlined the expectations for BDCs in Nigeria.
The guidelines prohibit ownership stakes in BDCs by banks, government agencies, and NGOs.
Permissible activities for BDCs include buying and selling foreign currencies, issuing prepaid cards, and acting as cash points for money transfer operators.
BDCs are restricted from taking deposits, granting loans, dealing in gold, or engaging in capital market activities. The guidelines emphasize that large transactions exceeding $10,000 require a declaration of the source.
Regarding the sale of foreign currencies, BDCs can sell forex for travel, medical bills, and school fees, up to specified limits per customer annually. Electronic transfers must account for at least 75 percent of sales, with the remaining 25 percent in cash.
There are two tiers of BDCs: Tier 1, with a national presence, and Tier 2, limited to operating in one state with a maximum of three locations. Prudential requirements, anti-money laundering, and countering the financing of terrorism regulations are also outlined in the guidelines.
Amidst the economic crisis, the Nigerian naira hit an all-time low of N2,000 against the dollar.
National Security Adviser Mallam Nuhu Ribadu instructed security agencies to crack down on currency speculators, leading to raids on BDCs nationwide and the arrest of illegal operators.
In a related development, the CBN announced new measures regarding the foreign exchange rate for Import Duty Assessment.
The closing FX rate on the date of opening Form M for importation of goods will now be used for assessing import duty, providing clarity and reducing uncertainty for both the Nigeria Customs Service and importers.
This decision replaces previous requirements outlined in the Central Bank of Nigeria Foreign Exchange Manual (Revised Edition), 2018, and is effective from February 26, 2024.
While acknowledging initial market volatility, the CBN expresses confidence that these reforms will stabilize the market, fostering necessary confidence for investment capital, and contributing to the growth and development of the Nigerian economy.
