By Amaka Ifeakandu
Lagos
Central Bank of Nigeria (CBN) has reviewed upward the minimum capital requirement for the operation of the Bureaux De Change (BDCs) from N10 million to N35 million.
The review according to CBN was part of measures to correct observed deficiences in the operations of the BDCs in Nigeria which led to gross inefficiencies and sharp practices in the foreingn exchange market. The step taken by the CBN aimed to check the growing incidence of rent-seeking, depletion of external reserves, financing of unauthorised transactions and dollarisation among others.
A statement issued by the CBN signed by Isaac Okoroafor on behalf of Director Corporate Communication said that the apex bank also review the mandatory cautionary deposit to N35 million, adding that such money shall be deposited in a non interest yielding account in the CBN upon the grant of Approval -in Prtinciple.
It said that promoters of BDCs expected to pay N100,000 as application fee, licencing fee of N1 million and annual renewal fee of N250,000.
The statement further said that all existing BDCs and those currently operating with a final approval letters are required to comply with the requirement on mandatory cautionary deposit by July 2014 while all current applications expected to comply with the rules.
The apex bank however said that the compulsory membership of the Association of Bureau De Change Operators of Nigeria (ABCON) is no longer needed for the licencing of BDCs.
The CBN statement further said that its” expectation is to have BDCs that are properly structured, effectively regulated and well capitalised to meet the objective for which operators were licenced”. It envisaged the emergence of well-capitalised and structure entities that can effectively perform the roles of the BDC in the economy.
The apex bank expected partnership between BDCs and renowed companies engaged in inward and outward money transfers in Nigeria, adding that it was in expectation of this collaboration that the CBN approved the guidelines for international money transfer in Nigeria.
The statement also pointed out that under the guidelines, Western Union, Moneygram and RIS financial Services have been authorised to carry out inward and outward transfer services in Nigeria.
The statement said that the needed creation of robust and sustainable business franchises that are not dependent on rent-seeking activities but are properly situated to compete in the foreign exchange market and deliver superior values and returns.