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Nigeria: ABCON Urges CBN to Reassess Capital Requirements for BDCs

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ABCON Urges CBN to Reassess Capital Requirements for BDCs
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Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria (ABCON), has called on the Central Bank of Nigeria (CBN) to lower the capital thresholds imposed on Bureau De Change (BDC) operators. In a statement released to The PUNCH on Sunday, Gwadabe linked the strength of the naira to the successful implementation of CBN reforms.

Earlier in May, the CBN introduced new operational guidelines for BDCs, which took effect on June 3. These guidelines require all existing BDCs to reapply for a new license under their chosen category—either Tier 1 or Tier 2—within six months, and to meet the minimum capital requirements associated with that category. Under these rules, Tier 1 operators must maintain a capital base of N2 billion, while Tier 2 operators are required to have N500 million, along with non-refundable license fees of N5 million and N2 million, respectively.

Gwadabe argued that the current capital requirements pose a significant challenge for most operators. He urged the CBN to consider a downward review of these thresholds, contending that a more attainable capital base would better support the industry’s growth. He also proposed that ABCON be granted self-regulatory status. According to Gwadabe, this move would enable the association to provide forward guidance to its members, adopt operator IT platforms to drive technological advancement, and enhance transparency in market operations. Additionally, self-regulation would empower ABCON to impose sanctions on non-compliant operators, thereby reinforcing adherence to regulatory standards.

On the topic of the naira’s recent rally, Gwadabe highlighted that the currency had strengthened in both official and parallel markets. Officially, the naira traded at 1,474.78 per dollar—a seven-month high—while in the parallel market, it appreciated to N1,610 per dollar over the weekend. He credited this rebound to the newly implemented Foreign Exchange Code, which has boosted investor confidence. Gwadabe noted that addressing the challenges faced by BDCs would further support the naira against the dollar.

Gwadabe also called on all BDCs and authorized dealers to comply with the FX Code guidelines, and to adopt comprehensive regulatory, management, board, and activity reporting systems to manage risk exposures detailed in their AML/CFT manuals. He echoed the CBN’s position that any institution active in the foreign exchange market must submit a detailed implementation plan outlining their strategy for achieving full compliance with the FX Code.

In a related development, the CBN recently waived the 2025 annual license renewal fee for all existing Bureau De Change operators. This waiver comes in the wake of the 2024 implementation of the Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria and amid the ongoing transition to a new regulatory framework for BDCs.

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