• Wednesday, April 24, 2024
businessday logo

BusinessDay

CBN hammer dangles over erring BDCs for illegal transactions

CBN resumes dollar sales to banks left out of Tuesday deals

… concludes investigation on Crown Agents… BDC Association reacts

The Central Bank of Nigeria (CBN) will soon clampdown on erring Bureau De Change (BDC) operators for illegal transactions.

Already the apex bank had concluded an investigation of one of the BDCs, called Crown Agent and will soon take action on it.

“For the last few weeks, we have been investigating and there will be quite a number of players out there that have been bringing in money and selling in less than official ways,” Folashodun Adebisi Shonubi acting governor, said at a press conference in Lagos.

He said, “One of those that we have investigated recently is Crown Agents. We have reason to believe that Crown Agents have been working with international agencies who rather than bring the money through the normal system, pass through them and they will then sell to Nigerian companies rather than doing the proper thing.”

“They can expect to hear from us shortly, and they will not be the only ones. Also, BDC that cannot go electronic. I think it will soon be fading out of the system because we don’t believe that we should still be heavy into cash, he said.

Responding, Aminu Gwadabe, national President of Association of Bureau De Change Operators of Nigeria (ABCON), said ABCON as a custodian of regulation will continue to support measures on reforms and standardisation of its members operational procedures.

Read also: Naira flat ahead of new guideline for importers, BDCs

He said over the years his members nationwide have embraced the digitisation of their office activities from manual to automation.

“Our members interface with the CBN online real time for their timely rendition of returns. Our members are also integrated to the NIBSS platform for verification and validation of their clients Bank Verification Number instantly. Our members render their suspicious transitions and cash transactions report on NFIU GoAML live.

In view of the above-mentioned layers of our automation journey I believe our members have long prepared for technology and automation where the future holds,” he said.

According to him the Association as a self-regulatory organization is collaborating with the regulators and the security agencies on awareness of money laundering and terrorism financing vulnerabilities and threats with a view on how to mitigate the vulnerabilities.

“It is therefore germane for any erring member to be penalized accordingly. Finally, on behalf of our members I want to express our assurances to the CBN and our readiness to be on the same page on their aspirations for the strengthening of our local currency and the elimination of volatility in the market.

Read also: CBN to clear FX backlog in two weeks, refutes JP Morgan’s debt

“Over the years the BDCs have remained the most potent pass through effect and transmission mechanism of the apex bank foreign exchange policies,” Gwadabe said.

The CBN in July 2023 updated the number of BDCs operating in the country, confirming 5,687 operating licenses.

This was disclosed in a publication titled, ‘Approved BDCs’, seen on the CBN website.

The CBN had before then said it would come up with the full list of licensed BDCs operating in the country, contrary to reports on license revocation.

Gwadabe said the CBN was updating their BDCs register based on compliance criteria in obligations of BDCs return renditions and annual fees payments.

“I therefore advise my members to comply and avoid unnecessary sanctions and exclusion of their licenses,” he said.

The number of BDC operators in Nigeria has risen by more than 75-fold in 18 years, from 74 in 2005 to 5,687 in 2023, data from the CBN revealed.