The President of the Association of Bureau De Change of Nigeria, Aminu Gwadebe, has indicated that members of the association are contemplating mergers if the proposed operational guidelines are implemented.
The Central Bank of Nigeria recently released a draft paper titled ‘Revised Regulatory And Supervisory Guidelines For Bureau De Change Operations In Nigeria,’ suggesting an increase in the minimum share capital requirements for Bureau De Change operators to N2 billion and N500 million for Tier 1 and Tier 2 licenses, respectively.
Previously, the fee for a general license stood at N35 million.
Furthermore, the apex bank proposes that BDC license holders must make caution deposits of N200 million and N50 million for Tier 1 and Tier 2, respectively.
In response to these proposed guidelines, Gwadebe stated, “Definitely, that is why we are asking for the general license hold, where during that period of consolidation, no new licenses should be issued. They should allow the old licenses to come together and form those mega, consolidated operations in cash sale and ownership structure.”
He emphasized that the proposed cautionary deposit is not a global standard, highlighting that BDCs are not involved in deposit-taking operations like banks.
Gwadebe also mentioned that the association’s over 5,000 members nationwide would convene at the zonal level to discuss the CBN’s proposals and formulate a collective stance.
However, some BDC operators acknowledged the potential challenges posed by the proposed regulations, expressing concerns about raising the stipulated capital.
However, they recognized the potential benefits of the regulations in enhancing market regulation and eliminating unauthorized operators.
Meanwhile, Gwadebe revealed that the CBN was working on modalities to re-allow BDCs to operate legally in Nigeria, signaling a potential reversal of the ban imposed on BDC operations since July 2001.
Financial analysts, however, expressed reservations about the potential impact of the CBN’s move on the Nigerian currency, suggesting that it may only yield short to medium-term benefits.
