By 
The Association of Bureau De Change Operators of Nigeria (ABCON) has called on the Central Bank of Nigeria (CBN) to reverse its recently announced capital requirements for Bureau De Change (BDC) operations.
In a circular issued last Wednesday, the CBN introduced new guidelines for BDC operations, establishing two tiers of licences with distinct capital requirements. Tier 1 BDCs must now have a minimum capital of N2 billion, a non-refundable application fee of N1 million, and a non-refundable licence fee of N5 million. For Tier 2 BDCs, the minimum capital is set at N500 million, with a non-refundable application fee of N0.25 million and a non-refundable licence fee of N2 million.
Additionally, the CBN has mandated all existing BDCs to re-apply for new licences in their chosen category, providing a six-month grace period to meet the new capital requirements.
At the end of a virtual meeting themed “New CBN Regulatory & Supervisory Reforms for BDCs: Challenges and Way Forward,” BDC operators expressed strong opposition to the CBN’s new guidelines. They argued that the new requirements threaten their businesses and proposed alternative recommendations to be presented to the CBN.
ABCON President Aminu Gwadebe, reading the association’s recommendations, demanded an immediate reversal of the financial requirements. He suggested, “We propose that the capital requirements be adjusted to N500 million for Tier 1, N100 million for Tier 2, and N35 million for Tier 3, with each tier having different levels of engagement with the regulators. Existing owners of both eligible and revoked BDCs should be allowed to recapitalize instead of reapplying.”
Earlier this year, the CBN revoked the licences of 4,173 BDC operators for failing to meet regulatory requirements. The BDC operators now demand that the existing N35 million capital requirement be recognized as part of the recapitalization process.
“The CBN should conduct nationwide enlightenment campaigns to address investor concerns. The compliance period should be extended to two years for fairness. Existing BDCs should be allowed to retain their generic names rather than registering new names with the Corporate Affairs Commission,” ABCON stated. They also called for clearer terms of engagement for mergers and acquisitions and suggested reversing the 75 percent cards to 25 percent cash ratio to facilitate a smooth transition.
Many operators voiced outright rejection of the new guidelines, expressing concerns that the CBN does not recognize their importance in the financial sector. Ibrahim Bala, a BDC operator, said, “These guidelines are unacceptable to all.” Another operator, Kayode Taiwo, added, “The recapitalization seems like a move to generate revenue for the government. There’s no assurance that a future CBN governor won’t reverse these guidelines.”
A representative from Kamal BDC noted, “The CBN aims to stabilize the market through BDCs, but these guidelines are not the way forward.”
The CBN’s circular emphasized that BDC operators must adhere to corporate governance requirements and anti-money laundering, counter-terrorism financing, and counter-proliferation financing provisions.
During the meeting, members also called for innovative product offerings to ensure profitability and advocated for lobbying members of the National Assembly to support their cause.
Comments