HomeECONOMYCBN Issues New Guidelines for BDCs, Operators Must Reapply by December

CBN Issues New Guidelines for BDCs, Operators Must Reapply by December

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By Fasuyi Tolulope Samuel

The Central Bank of Nigeria (CBN) has issued new operational guidelines for Bureau de Change (BDC) operators, set to take effect from June 3, 2024. In a circular released on Wednesday, CBN’s Director of Financial Policy and Regulation, Haruna Mustafa, outlined the revised regulations, including changes to capital requirements and permissible activities.

Under the new guidelines, the minimum capital base for Tier-1 BDCs is set at ₦2 billion, while Tier-2 BDCs must maintain a capital base of ₦500 million. The mandatory caution deposit of ₦200 million for Tier-1 BDCs and ₦50 million for Tier-2 BDCs has been removed. These changes aim to streamline operations and enhance regulatory compliance.

Existing BDC operators are required to reapply for new licenses and meet the updated capital requirements by December 3, 2024. The CBN emphasized that all BDC transactions above USD 500 must be conducted through digital channels to ensure transparency and compliance with Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulations.

The new guidelines also prohibit BDC operators from engaging in street trading, international outward transfers, financing political activities, dealing in gold or other precious metals, and trading in crypto assets or other virtual assets. These measures are part of the CBN’s broader efforts to re-position the BDC sub-sector to better serve Nigeria’s foreign exchange market.

According to the circular, “The guidelines introduce new licensing requirements and categories of BDCs, as well as revise the permissible activities, financial requirements, corporate governance requirements, and AML/CFT/CPF provisions for BDCs.”

BDC operators are expected to declare the source of foreign exchange for transactions equivalent to USD 10,000 and above and ensure compliance with all relevant regulations. Additionally, customers can sell foreign currencies from their individual domiciliary accounts to BDCs, with such sales credited to the BDC’s Nigerian domiciliary account.

Payments for digital or transfer purchases of foreign currency by a BDC must be made to the customer’s Naira account. Non-resident customers may be issued prepaid NGN cards, subject to maximum credit and cumulative limits in line with Know Your Customer (KYC) requirements.

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