The Central Bank of Nigeria (CBN) has issued new operational guidelines for Bureau De Change (BDC) entities nationwide and has mandated that all BDCs reapply for licensing in accordance with these regulations within the next six months.
This development was announced in a revised guideline signed by Haruna B. Mustafa, the Director of the Financial Policy and Regulation Department at the CBN.
Under the new regulatory framework, Tier-1 BDCs are required to have a minimum capital base of N2 billion, while Tier-2 BDCs must maintain a minimum capital base of N500 million. Additionally, the application fee for a Tier-1 license is set at N1 million, with the licensing fee at N5 million. For Tier-2 licenses, the application fee is N250,000, and the licensing fee is N2 million.
The CBN has specified that BDCs must comply with the capital requirements for their respective license tiers within six months. The guidelines state, “All existing BDCs shall: Re-apply for a new license according to any of the Tiers or license category of their choice as provided in the Guidelines,” and “Meet the minimum capital requirements for the license category applied for within six (6) months from the effective date of the Guidelines.”
Tier-1 BDCs, under the new guidelines, are permitted to operate across all 36 states and the Federal Capital Territory (FCT) and may open franchises throughout the country, subject to CBN approval.
The guidelines also introduce several new restrictions for BDC operations, including prohibitions on futures, options, and derivative trading, conducting outward international transfers, receiving international inward transfers, and dealing in crypto assets or with entities that deal in crypto assets.
Regarding the sale of foreign exchange, the CBN has outlined specific conditions under which BDCs can sell forex, including:
– Personal Travel Allowance (PTA).
– Business Travel Allowance (BTA), provided that an individual receiving BTA on behalf of a non-individual entity is not entitled to PTA for the same trip.
– Payment of overseas medical bills.
– Payment of school fees abroad.
– Payment of professional examination and annual subscription fees.
– Repurchase of unused Naira from a non-resident, contingent on the presentation of the receipt issued at the point of purchase of the Naira. The restriction on cash payments does not apply if the original transaction was conducted in cash.
