Bureau De Change operators have rejected the Central Bank of Nigeria’s (CBN) new regulatory guidelines, which set a minimum capital base at N2 billion for tier-1 and N500 million for tier-2 operators.
Dr. Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON), stated that the capital requirement established by the CBN is enormous and significantly more than best practices worldwide.
As cited in The Nation report, he demanded that the capital base plan be immediately reversed, with N500 million going to Tier-1 BDCs, N100 million to Tier-2 BDCs, and N35 million to Tier-3 BDCs.
ABCON president stated that rather than reapplying for a new license, the CBN should permit the current owners of both revoked and qualified BDCs to recapitalise.
In his opinion, recapitalisation ought to acknowledge and incorporate the current N35 million in capital requirements.
He said:
Gwadabe also said the one per cent transaction margin required by the new BDC criteria is insufficient to cover labour overhead and operational costs, making it extremely difficult to turn a profit on the transactions.
He advocated for a two-year schedule, saying that the six-month compliance timeline, which starts on June 3, is insufficient to gather such sums.
He said:
According to him, the proposed large capital base would push legitimate BDC firms into the black market and depress exchange rates.
In order to assure policy uniformity, Gwadabe suggested extending the compliance period to two years, with grants of indemnification and guarantee.
He added:
TimesNow.com.ng earlier reported that the CBN removed the list of approved Bureau de Change (BDC) operators from its website following a new directive requiring BDCs to re-apply for operational licenses.
The development comes as the bank clarified the tier-based classification of BDCs, saying that the new rule followed an earlier circular for public input this year, which it has now incorporated and posted on its site on Wednesday, May 22, 2024.
Proofreading by James Ojo Adakole, journalist and copy editor at TimesNow.com.ng.
Source: TimesNow.com.ng
