Home Business Stakeholders React as CBN Revokes Licenses of 4,173 BDCs

Stakeholders React as CBN Revokes Licenses of 4,173 BDCs

by News Desk
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The Central Bank of Nigeria (CBN) has revoked the licences of 4,173 Bureaux De Change Operators. The list of affected BDC operators was released on the bank’s website on Friday.

The apex bank in a statement by its spokesperson, Sidi Hakama said the affected institutions failed to observe at least one of its regulatory provisions for licensed BDCs.

The reason is that the companies failed to comply with the required payment of all necessary fees, including licence renewal, within the stipulated period in line with the guidelines; rendition of returns in line with the guidelines; and compliance with guidelines, directives and circulars of the CBN, particularly Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT) and Counter-Proliferation Financing (CPF) regulations.
Hakama said the bank acted in exercise of the powers conferred on it under the Bank and Other Financial Institutions Act (BOFIA) 2020, Act No. 5, and the Revised Operational Guidelines for Bureaux De Change 2015 (the Guidelines).

In a reaction to the development, renowned capital market Professor and the President of the Association of capital market Academics of Nigeria, Uche Uwaleke, welcomed the decision as the way to go for the stabilisation of the Forex market.
The former commissioner of finance in Imo State said the action of the apex bank will help to cut speculation and round tripping in the market

“It is a welcome development. Will help sanitize that segment of the Fx market, reduce speculative attack on the naira and make it easier for the CBN to supervise the BDCs,” Professor Uwaleke said yesterday in a chart with our correspondent.
A renowned economist, Professor Tayo Bello has frowned at the massive revocation of over 4,000 Bureau De Change(BDCs) licenses, saying, the tactics adopted by the Central Bank of Nigeria (CBN) is like killing an ant with a sledge hammer.
Speaking to LEADERSHIP WEEKEND yesternight, Bello said, this development will only swell up the number of black market operators as those whose licenses were withdrawn will find their way into the black market forex trading.

This, he said, will further compound the challenge that the apex bank is trying to fix.
Stating that the apex bank could have sanitised the system by sticking to its recent framework on recapitalisation of the BDCs which ultimately will push some out of the system, he added that, banks are also culprit in this regards as they cannot be isolated from the fraud that BDCs were accused of.
He tagged the move as a hasty decision taken without wide consultation, believing that this withdrawal of licenses will further create unemployment in a country that is already battling high unemployment rate.
“The banks too need to be sanitised because the issues has connections with Forex departments of banks as well as CBN. Wholistic investigations should be carried out and CBN should also sanctiion banks and officials found culpable in this act as well,” he pointed out.

The CBN had recently introduced a draft guideline for BDC operations across the country.
Major provisions introduced to the guidelines of BDCs include; the introduction of N2 billion minimum share capital for Tier-1 BDCs, limiting buying and selling forex in cash by BDCs to $500, and a $10, 000 year limit for school fees amongst others.”The CBN is revising the regulatory and supervisory guidelines for Bureau de Change operations in Nigeria. Compliance with the new requirements will be mandatory for all stakeholders in the sector when the revised guidelines become effective.

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