Nigeria: CBN Extends BDC Recapitalisation Deadline to June 2025

The Central Bank of Nigeria (CBN) has extended the deadline for the recapitalisation of Bureau De Change (BDC) operators by six months, moving it from December 3, 2024, to June 3, 2025.

Aminu Gwadabe, President of the Association of Bureaux De Change of Nigeria (ABCON), announced the extension during an emergency virtual general meeting attended by over 220 CBN-licensed BDC operators, ABCON council members, and other stakeholders.

Reason for the Extension

According to Gwadabe, the CBN’s decision was prompted by the low compliance levels among BDC operators with the new capital requirements. He commended the central bank for its understanding and reassured members of the association’s commitment to working closely with the CBN to facilitate a smooth recapitalisation process.

“The CBN is willing to partner with BDCs to ensure that the recapitalisation process is seamless. We are sending a message of unity, collaboration, and opportunities to ABCON members to continue striving to meet the new capital requirements,” Gwadabe said, expressing gratitude for the extended timeline.

Recapitalisation Framework and New Guidelines

The revised guidelines categorize BDCs into two tiers, each with distinct capital requirements and operational scope:

1. Tier-1 BDCs:
   • Minimum capital requirement: N2 billion.
   • Allowed to operate nationally, including the Federal Capital Territory (FCT).
   • May establish branches and appoint franchisees, subject to CBN approval.
   • Franchisees can adopt the franchisor’s branding, technology platform, and regulatory standards.
   • Minimum distance of one kilometre required between branches and franchisees.
2. Tier-2 BDCs:
   • Minimum capital requirement: N500 million.
   • Restricted to operations within one state or the FCT.
   • May establish up to five branches in their area of operation, with CBN approval.
   • Minimum distance of one kilometre required between branches.
   • Not permitted to appoint franchisees.

The guidelines also prohibit certain entities, such as banks, financial holding companies, and regulated financial services providers, from holding a BDC licence.

BDC Activities and Compliance Expectations

The CBN’s regulations empower BDC operators to engage in foreign currency transactions, maintain accounts in both naira and foreign currencies, and collaborate with banking partners to issue prepaid debit cards.

This recapitalisation effort is part of broader reforms aimed at repositioning the BDC sector to better support Nigeria’s foreign exchange market. The guidelines are designed to enhance corporate governance, promote anti-money laundering (AML) measures, and improve financial transparency within the industry.

ABCON has called on its members to view the recapitalisation process as an opportunity to strengthen their operations and align with the evolving regulatory landscape. Gwadabe highlighted the “immeasurable opportunities” that compliance with the new capital requirements could bring.

As the BDC sector adapts to these changes, the extended timeline offers operators a chance to restructure and meet the new standards, ensuring their continued relevance in Nigeria’s financial ecosystem.