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The Central Bank of Nigeria (CBN) has introduced new regulatory measures for Bureau de Change (BDC) operators, limiting their weekly foreign exchange (FX) purchases to a single authorised dealer and enforcing stricter compliance with Know Your Customer (KYC) requirements.
In a circular signed by W. J. Kanya, Acting Director of the Trade and Exchange Department, the CBN mandated that each BDC can only procure up to $25,000 weekly from a chosen Authorised Dealer Bank (ADB). Any violation of this directive will attract appropriate sanctions.
“BDC shall approach its preferred Authorised Dealer Bank (ADB) and can only procure the said amount from only that bank of its choice in a week. Any breach of this condition will attract appropriate sanction,” the circular stated.
The CBN further instructed that the selling rate of FX by Authorised Dealer Banks to BDCs must align with the prevailing rate at the Nigerian Foreign Exchange Market (NFEM) window. BDCs, in turn, are permitted to sell FX to end-users at a rate not exceeding a one per cent margin above the buying rate.
Additionally, the apex bank directed authorised dealer banks to submit weekly reports on FX sales to BDCs in a specified format. BDCs are also required to provide daily reports on their FX purchases and sales through the Financial Institutions Forex Reporting System (FIFX).
The CBN specified that funds acquired by BDCs should only be allocated to particular transactions, including Business Travel Allowance (BTA), Personal Travel Allowance (PTA), overseas school fees, and overseas medical bills. It further stipulated that the maximum disbursement per transaction should not exceed $5,000 per quarter.
To enhance transparency, BDCs must maintain records of all transactions, including the Bank Verification Number (BVN) of end-users and endorsements of disbursed amounts in beneficiaries’ international passports.
The CBN also underscored the importance of compliance with anti-money laundering (AML) regulations and KYC principles, warning that any authorised dealer or BDC found diverting funds or violating these guidelines would face sanctions, including the suspension of its operating license.
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