Bureaux De Change (BDCs) operators under the aegis of Association of Bureaux De Change Operators of Nigeria (ABCON) has appealed to the Central Bank of Nigeria (CBN) to review the new licensing requirements announced for BDC operations.
On June 23rd, the CBN announced new requirements for BDC operations. These include 250 percent
On June 23rd, the CBN announced new requirements for BDC operations. These include 250 percent
increase in minimum capital base to N35 million, and a N35 million mandatory caution deposit.
Speaking at the general meeting of the South West zone of the Association, ABCON’s Ag. President, Alhaji Aminu Gwadabe said that the executive council of the Association has met with the CBN Governor, during which it appealed for a review of the new requirements.
Gwadabe said, “Following the announcement of the new requirements, the executive council met, and articulated our position in a letter, which was immediately submitted to the Governor of CBN.
Thereafter, we took our case to both chambers of the National Assembly, and met separately with the House Committee on Banking and Currency, and the Senate Committee on Finance.
During these meetings we articulated why the severe impact of the new requirements to the economy, especially massive retrenchment of staff, which would aggravate the severe unemployment in the country.
“These steps have started yielding some results. For example, the CBN Governor, upon receiving our letter, invited the executive council for a meeting where we reiterated the position of ABCON to the new requirements.
Among other things, we showed that dollar sales to BDCs constitute less than 16 percent of the total foreign exchange sold by the CBN since 2006, and thus not as much as been claimed by the CBN. For example the annual and quarterly economic reports of the CBN show that out of the $26.82 billion dollar sold by the CBN in 2012, $5.55 billion representing 19 percent was sold to BDCs.
Similarly, out of the $33.3 billion sold by the CBN in 2013, $5.31 billion, representing 15.9 percent was sold to BDCs. Also, in the first quarter of 2014, out of the $14.8 billion sold by the CBN, $1.7 billion, representing 11.4 percent was sold to BDCs. Note that the percentage of dollar sales to BDCs has been declining since 2012.”
This indicates that the BDCs are not responsible for the depletion of the external reserves as noted by the CBN circular
“Furthermore, we argued against the necessity of N35 million as mandatory caution deposit, when, BDCs are not deposit taking institutions, and operate on cash and carry basis.
We also averred that the 250 percent in capital base and three weeks for compliance is unfair when compared with increase in capital requirements for other CBN regulated entities. The CBN Governor, after listening to our positions, promised to look into the new requirements.
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