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The Central Bank of Nigeria (CBN) is contemplating a significant increase in the share capital requirements for Bureau De Change (BDC) operators, proposing N2 billion for Tier 1 licenses and N500 million for Tier 2 licenses. This comes as part of the CBN’s efforts to strengthen the regulatory framework for BDC operations in the country.
The draft paper titled “Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria” outlines the proposed changes and was published by the CBN on Friday. The existing license fee for BDC operators was N35 million for a general license.
Amidst the recent challenges faced by currency operators due to the depreciation of the naira against the dollar, the CBN aims to address concerns related to the operations of BDCs. Government officials have attributed the naira’s decline to black market operators, although liquidity issues also contribute to the challenges.
The proposed guidelines introduce a two-tier license system for BDC operators:
Tier 1 BDC:
- Authorized to operate nationally.
- Can open branches and appoint franchisees with CBN approval.
- Minimum share capital requirement: N2 billion.
- Mandatory Caution Deposit: N200 million.
- Application and license fees: N1 million and N5 million, respectively.
Tier 2 BDC:
- Authorized to operate only in one state or the FCT.
- Allowed up to three locations (head office and two branches) with CBN approval.
- Not permitted to appoint franchisees.
- Minimum share capital requirement: N500 million.
- Mandatory Caution Deposit: N50 million.
- Application and license fees: N250,000 and N2 million, respectively.
The CBN emphasizes that the prescribed minimum capital and any subsequent capital injection for BDCs will be subject to verification by the central bank. The proposed changes aim to enhance the regulatory environment for BDC operations and ensure the stability and integrity of the financial system. If endorsed, the guidelines will become effective on a date determined by the CBN.
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