CBN’s new rule on BDC’s will stifle investment, says ABCON

By Odunewu Segun

The President of the Association of Bureau De Change operators, ABCON, Alhaji Aminu Gwadabe has said the new rules by the Central Bank barring BDC operators from having more than a branch nationwide will stifle investment in the sector and lead to job losses.

Gwadabe disclosed this why reacting to the new guidelines recently in Lagos. He said aside from contributing to the cash flow in the economy, BDC operators also keeps thousands of Nigerian youths gainfully employed. According to him, limiting BDC operators to a branch, will limit expansion, and by extension the numbers of youths to be employed.

According to the guideline contained in a circular to all Bureaux De Change dated November 30, 2015 and title revised operational guidelines for Bureaux De Change and signed by Kevin N. Amugo, Director, Financial Policy and Regulatory Department, Bureau De Change is Licensed as a unit institution, and therefore forbidden from having branches.

Thus, “No Bureau De Change shall have a branch office outside its registered office” and that “All Bureaux De Change that under the 2002 Guidelines have branches are required to close such branches within 90 days of the 2015 guidelines.”

The guideline which is like a harmonization of all the various circulars on BDCs that the CBN had been issuing since 2012 supersedes the guideline of May 2012 and shall take effect from January 1, 2016.

Other provisions of the guidelines stipulates that, “Any person/individual wishing to sell foreign currency above $10,000 or its equivalent to a BDC shall be required to disclose the source; and  that “transactions shall be on spot basis (immediate settlement). For the avoidance of doubt, forward transactions by BDCs are not allowed.”

It also stipulated that “the maximum amount per transaction for a BDC shall be determined from time to time by the CBN with respect to business and personal travel allowances. The maximum amount currently for PTA and BTA per quarter is $4,000 and $5000, respectively.”

Among other provisions, it said that the purchases of foreign currencies by intending travelers shall be supported by their Bank Verification Number (BVN), validly issued and genuine traveling documents (ticket, passport, and visa) and the sales receipt duly signed by the customer.