The Central Bank of Nigeria (CBN) has mandated all Bureau de Change (BDC) operators in the country to reapply for operational licenses under new regulatory guidelines. This directive comes as part of the CBN’s efforts to reform and reposition the BDC sub-sector in the foreign exchange market.
The new guidelines, effective June 3, 2024, introduce revised licensing requirements and categories for BDCs, as well as updated permissible activities. In a statement issued on Wednesday, Haruna B. Mustafa, Director of the CBN’s Financial Policy and Regulation Department, announced that these changes follow extensive stakeholder consultations.
“As part of reforms to re-position the Bureau De Change (BDC) sub-sector to play its envisioned role in the foreign exchange market in Nigeria, the Central Bank of Nigeria (CBN) issued the Draft Operational Guidelines for BDC Operations in Nigeria in February 2024, for stakeholder comments/inputs,” the statement read.
The new regulatory framework aims to ensure that all BDC operators comply with updated financial, corporate governance, and anti-money laundering/countering the financing of terrorism (AML/CFT) provisions.
“Following the conclusion of the stakeholder consultations and in exercise of the powers conferred on it by Section 56 of the Banks and Other Financial Institutions Act (BOFIA) 2020, the CBN hereby issues the attached Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria 2024 for compliance by all operators and promoters of proposed BDCs in Nigeria,” Mustafa added.
Existing BDCs and new applicants are required to reapply for licenses according to the newly defined tiers or license categories. They must meet the minimum capital requirements for their chosen category within six months from the guidelines’ effective date.
“Applicants for new BDC licenses are required to meet the conditions for the grant of a license in accordance with the Tier or category of BDC chosen as stipulated in the Guidelines,” the CBN stated.
These guidelines replace the Revised Operational Guidelines for Bureau De Change in Nigeria issued in November 2015 and all related circulars and directives.
The directive underscores the CBN’s commitment to enhancing the regulatory framework for BDCs to ensure their effective participation in the forex market while maintaining financial stability and compliance with international standards.