ABCON to CBN: Grant us self-regulatory status to sanction erring operators

The Association of Bureaux De Change Operators of Nigeria (ABCON) has asked the Central Bank of Nigeria (CBN) to grant the group self-regulatory status.

In a statement on Saturday, Aminu Gwadabe, president of ABCON, said the status will enable ABCON to sanction non-compliant bureau de change (BDC) operators.

Gwadabe said the self-regulatory status will also aid the forward guidance of its members and boost compliance with regulatory guidelines.

He also called on the CBN to adopt the operators’ IT platforms to entrench a tech-driven industry and boost transparency in market operations.

‘REVIEW CAPITAL REQUIREMENT FOR BDCs’

Gwadabe asked the apex bank to lower the capital requirement for BDC recapitalisation to ensure that more operators can meet the financial threshold.

He said meeting the capital base requirement remains a challenge for BDC operators.

On February 23, 2024, the CBN increased the minimum capital requirement for tier-1 BDCs to N2 billion and for tier-2 BDCs to N500 million.

The apex bank raised the minimum capital requirement from the previously set N35 million, which applied to all BDCs before the new regulation.

‘NAIRA HITS 7-MONTH HIGH AT OFFICIAL MARKET’

Gwadabe said the recent appreciation of the naira against the dollar and other global currencies confirms that the CBN’s policies and forex market reforms are yielding positive results.

Speaking on the sustained rise of the naira in both official and parallel markets, Gwadabe said the currency strengthened significantly, reaching N1,485 per dollar at the official market.

He said it was the naira’s strongest level in seven months.

The ABCON president further mentioned that the naira climbed to N1,610 per dollar in the parallel market over the weekend, reinforcing confidence in ongoing forex reforms.

Listing factors driving the naira rebound, Gwadabe mentioned the newly implemented foreign exchange (FX) code, investors confidence, investment in oil and gas output, streamlining diaspora remittances aimed at enhancing market liquidity, transparency and guiding market participants in Nigeria’s foreign exchange sector.

He added that meeting the needs of BDCs will further strengthen the local currency against the dollar.

‘ABCON ASKS BDCs TO COMPLY WITH FX CODE GUIDELINES’

Gwadabe advised BDC operators to ensure full compliance with the FX Code guidelines in their operations, “while also adopting regulatory, management, Board, and activity report for their Risk exposures on their AML/CFT manual”.

The ABCON president backed CBN’s position that all institutions engaged in the FX market must also provide a detailed implementation plan outlining how they intend to achieve full compliance with the FX Code to the apex bank.

“This plans are expected to be formally approved and signed by the institution’s board of directors, and it must be accompanied by relevant extracts from the board meeting where the plan was reviewed and endorsed,” Gwadabe said.

He said the FX Code is comprehensively addressing various aspects of FX market conduct and practice and is not intended to be exhaustive.

Gwadabe added that the policy authorises the apex bank to establish and enforce directives regarding the standards for financial institutions under which FX deals are to be conducted.

According to the ABCON president, the code will further entrench transparency and accountability in the FX market and continually sustain the naira rally.

Gwadabe reaffirmed that CBN-licensed BDCs remain fully prepared for regulatory reforms that would improve their efficiency, transparency, and compliance with set regulations in the best interest of the financial system and economy.