CBN: We’ve revoked licences of BDCs involved in unwholesome practices

The Central Bank of Nigeria (CBN) says it has revoked licences of bureau de change (BDC) operators involved in unwholesome practices.

Olayemi Cardoso, CBN governor, spoke at the Vanguard Economic Summit themed ‘Reforms In The Era of Global Economic Uncertainties: Whither Nigeria?’ on Thursday.

On May 22, the apex bank issued regulatory guidelines for BDC operations after consultation with stakeholders — three months after releasing draft revised regulatory and supervisory guidelines for the operators.

Represented by Blaise Ijebor, CBN’s director of risk management department, Cardoso said by issuing the guidelines, the bank is working to address the challenges of BDC in the foreign exchange (FX) market.

“To this end, we have developed a revised regulatory and supervisory guidelines for BDC operations in Nigeria,” he said. 

“This is aimed at ensuring that BDCs play the right role that they have been envisioned to play in the foreign exchange market. 

“In addition, we have also revoked the licence of BDCs, who it has been established have been involved in unwholesome practices.”

In the guidelines, CBN said BDCs or their franchisee shall not engage in street-trading of foreign currencies, maintaining any type of account for any member of the public, including accepting any asset for safekeeping/custody, taking deposits from or granting loans to members of the public in any currency and in any form.

Other non-permissible activities are retail sale of foreign currencies to non-individuals, except for business travel allowance (BTA), international outward transfers, off-shore business or maintaining foreign correspondent relationships with any foreign establishment, opening or maintaining any account with any bank or financial institution outside Nigeria without the prior written approval of the CBN.

In the guideline, CBN also directed all BDCs to reapply for licences.

Speaking further at the event, the CBN governor said the bank will continue to be focused on increasing the flows of diaspora remittances into the economy — through official channels — to improve liquidity in the FX market.

“We are working closely with key stakeholders in these segments. And recently, we pushed this forward,” Cardoso said.

“We licenced 14 new international money transfer operators (IMTOs) to enhance competition, efficiency, and transparency in the FX market.”

He said the bank remains committed to a transparent and functional FX market where price discovery is premised on market-driven frameworks.

Cardoso expressed confidence that this will lead to long-term stability of the naira.