Written by Sarah NEGEDU

CBN bans BDCs from multiple outlets, street trading

Operators of Bureaux de Change, BDCs, across the country have until March 10, 2016, to shut down all branch operations except for its registered office, or risk facing sanctions from the central bank.

A recent guideline from the CBN also advised operators to cut off all business relations with street traders in foreign currencies or risk losing their licenses.

The apex bank in its recently released revised guidelines for BDCs directed that all forex operators, must forthwith, operate as a unit, since ‘Bureau De Change is licenced as a unit institution.’

The operators have a 90 day ultimatum within those operating multiple branches must trim down to a single branch, as those branch operations would no longer be allowed in the subsector.

In a circular titled; ‘Revised Operational Guidelines for Bureaux De Change in Nigeria’, CBN stated that “Every BDC shall transact business at its registered office approved by the CBN as any BDC that operates outside its registered office shall be sanctioned. Similarly, it shall be a ground for the revocation of licence should any street trader in foreign currencies be found to have any business relationship with a Licenced BDC.”

The bank further directed all BDCs that under the 2002 Guidelines have branches, “to close such branches within 90 days of the 2015 guidelines.”

On the financial requirement for licensing, CBN noted, “Not later than six months after the grant of Approval in Principle, AIP, the promoters of a proposed BDC shall submit application for the grant of a final licence to the Governor, Central Bank of Nigeria, Abuja, with the following documents: Evidence of payment of anon-refundable licencing fee of N1 million only or any other amount as may be determined by the CBN from time to time; the names, designations and signed Curricula Vitae (CV) of the proposed members of the top management; Evidence of incorporation of the company with CAC; evidence of payment of N35 million mandatory caution deposit, or any other amount as may be determined by the CBN from time to time, into a designated CBN account; evidence of having suitable office accommodation for the operation of the proposed BDC.”

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