The Association of Bureaux De Change Operators of Nigeria (ABCON), has urged the Central Bank of Nigeria to review the capital requirements for BDCs.
ABCON President Aminu Gwadabe, said in a statement that “meeting the capital base remains a big challenge for the majority of operators.”
In May, the CBN issued new operational guidelines for BDCs, which became effective June 3, directing all existing BDCs to re-apply for a new license according to their preferred categories (Tier 1 and Tier 2 BDCs) and meet the minimum capital requirement of the license category applied for within six months from the effective date of the guidelines.
According to the guidelines, BDCs with Tier 1 licenses are expected to have a capital base worth N2bn, while Tier 2 licenses must have N500m with non-refundable license fees of N5m and N2m, respectively.
He also called on the CBN to grant ABCON self-regulatory status to aid forward guidance of its members and adopt the operators’ IT platforms to entrench a tech-driven industry and boost transparency in market operations.
According to him, granting self-regulatory status to ABCON will enable the group to sanction erring operators on non-compliance and boost compliance with regulatory guidelines.
Gwadebe also hinged the rally of the naira on the reforms by the CBN.
The naira strengthened at both the official and parallel markets, where it recorded a major comeback, exchanging officially at 1,474.78/$, one of its strongest positions in seven months. The naira equally rallied to N1,610 to a dollar at the parallel market over the weekend.
Gwadabe attributed the naira rally on the newly implemented Foreign Exchange Code, which has strengthened investors’ confidence and added that meeting the needs of BDCs will further strengthen the local currency against the dollar.
He urged all BDCs and authorised dealers to comply with the FX code guidelines in their operations while also adopting regulatory, management, board, and activity reports for their risk exposures in their AML/CFT manual.
The ABCON president also backed the CBN’s position that all institutions engaged in the foreign exchange market must provide the CBN with a detailed implementation plan outlining how they intend to achieve full compliance with the FX Code.
