The Central Bank of Nigeria (CBN) is thinking about raising the share capital required for Bureau De Change (BDC) operators to operate in the country. They propose to set the capital at N2 billion for Tier 1 licenses and N500 million for Tier 2 licenses.
Previously, BDC operators needed to pay N35 million for a general license to operate.
These proposed changes are outlined in a draft paper titled “Revised Regulatory And Supervisory Guidelines For Bureau De Change Operations In Nigeria,” which the CBN published on Friday.
If these guidelines are approved, they will introduce various changes to how BDC operations are conducted in Nigeria. The CBN will decide on the effective date of these changes.
In recent times, BDC operators have faced criticism due to the sharp decline of the naira against the dollar. While some government officials blame these operators for the currency’s fall, others acknowledge that liquidity issues also contribute to the problem.
This week, the Economic and Financial Crimes Commission (EFCC) arrested over 250 BDC operators in Abuja and many more across the country.
As part of the proposed changes, the CBN will introduce minimum capital requirements and a two-tier licensing system for BDC operators in Nigeria.
The guidelines read, “A Tier 1 BDC is authorised to operate on a national basis can open branches and may appoint franchisees, subject to the approval of the CBN.
“A Tier 1 BDC (which is the franchisor) shall exercise supervisory oversight over its franchisees. All franchisees shall adopt their franchisor’s name, branding, technology platform, and rendition requirements.
“Also, a Tier 2 BDC is authorised to operate only in one state or the FCT. It may have up to three locations – a head office and two branches, subject to approval of the CBN. It is not permitted to appoint franchisees.”
“Under Tier 1, operators are expected to have N2bn as minimum share capital while also depositing a Mandatory Caution Deposit of N200m.
“The application and licence fee is also N1 million and N5 million respectively.
“Under Tier 2, operators are expected to have N500 million as minimum share capital while depositing a Mandatory Caution Deposit of N50 million. The application and licence fee are also N250,000 and N2 million respectively.”
The apex bank also stated that the prescribed minimum capital of BDCs and any subsequent capital injection shall be subject to verification by the CBN.
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