The Association of Bureau De Change Operators of Nigeria has demanded that the Central Bank of Nigeria reverse the new capital requirement for its operations.
In a circular issued last Wednesday, the CBN issued fresh guidelines for the operations of the Bureau De Change in Nigeria which include two new categories of licences with different capital bases.
According to the new rules, BDCs in the Tier 1 category would be required to have a minimum capital requirement of N2bn, pay N1m as a non-refundable application fee and N5m as a non-refundable licence fee.
The apex bank disclosed that Tier 2 BDCs would be required to have a minimum capital base of N500m, N0.25m as a non-refundable application fee and N2m as a non-refundable licence fee.
Also, the regulator mandated all existing BDCs to re-apply for new licenses in their preferred category with a six-month grace period to meet the capital requirement.
The BDC operators, at the end of a virtual meeting themed ‘New CBN Regulatory & Supervisory Reforms for BDCs: Challenges and Way Forward’ on Tuesday, decried the move by the CBN.
They noted that the apex bank was threatening their business and came up with recommendations that they claimed would be presented to the CBN.
Reading the recommendations of the association, the President of ABCON, Aminu Gwadebe, demanded, “Immediate reversal of the financial requirements to our submitted proposal on the draft guidelines for Tier 1 N500m, N100m for Tier 2 and N35m for Tier 3 with each having different levels of engagement with the regulators.
“They should allow the existing owners of both the eligible BDCs and revoked BDCs to recapitalise instead of reapplying.”
Recall that earlier in the year; the CBN revoked the licences of 4,173 bureau de change operators for failing to observe regulatory provisions.
The money changers demanded that the existing N35m capital requirements should be recognised and be part of recapitalisation.
“The CBN should embark on nationwide enlightenment to address the fears of the willing investors. The timing for compliance should be extended to two years for fairness. Existing BDCs to be allowed to use their generic names as against registration of new names at the CAC.
“The terms of engagement for mergers and acquisitions should be properly explained to allow for inclusion. The ratio of 75 per cent cards and 25 per cent cash should be reversed inversely to encourage smooth takeoff,” the association noted.
Some of the operators expressed outright rejection of the new guidelines amid concerns that the CBN was not seeing them as an important part of the financial sector.
An operator, Ibrahim Bala, said, “These guidelines are unacceptable to all.”
Another operator, Kayode Taiwo, remarked, “As for the recapitalisation, they just want money for the government. When they raised the BDC capital to N70m, did they return 50 per cent of it to the BDCs? There is no guarantee that another CBN governor will not reverse the new guidelines.”
A representative of Kamal BDC lamented, “The CBN wants to stabilise the market through BDCs.”
In the circular announcing the new guidelines, the CBN stated that BDC operators were expected to adhere to corporate governance requirements and anti-money laundering, counter-terrorism financing, and counter-proliferation financing provisions.
During the meeting, some of the members also called for the association to be creative in terms of product offerings to be able to operate profitably in the market.
Calls were also made for advocacy and lobbying of National Assembly members in the interest of the group.
