CBN’s new BVN directives curb fraudulent activities at BDCs

It is no longer business as usual for cashiers of Bureau de Changes (BDCs), who engage in fraudulent activities following the Central Bank of Nigeria’s (CBN) directives on Bank Verification Number (BVN).

The CBN on Wednesday in a circular to all banks and licensed BDCs put on notice with effect from November 1, 2015, that all customers desiring to purchase foreign exchange (FX) through all available channels in Nigeria must provide their BVN, which shall be validated by the CBN authorised FX dealer through the Nigeria Inter-Bank Settlement System (NIBSS) platform before transactions are consummated. 

There were cases of the staff of BDCs referred to as ‘end-cashiers,’ who at one time or the other left with some amount dollar purchased from the apex bank.

With the new directive from the CBN, analysts said last night that it would be difficult for these cashiers to escape with the dollar purchased, thereby instituting transparency as well as limiting activities of speculators on the FX market.

“It is something we cannot do anything about. All BDC operators and cashiers are all registered. We are not complaining because the fraudulent activities of cashiers will reduce. It provides information on the people who are buying from us,” Andrew Elueni, managing director/CEO, Flawless Capital Limited, told BusinessDay on phone.

Meanwhile, the naira has maintained stability for the past two months closing between N222 and N225 against the dollar at the BDC segment of the FX and parallel market.

Elueni attributed this to some policies put in place by the CBN, which he said had been effective. Also, he disclosed that people were not buying as much dollar as they needed due to scarcity of naira or low purchasing power.

However, the naira depreciated in value against the dollar by 0.77 percent to close at N198.77 at the interbank FX market, while the CBN’s clearing rate which was adjusted to N196.98/$ on Tuesday was yesterday readjusted to N197.00k/$.

The CBN’s new directive insisting in BVN for banks and BDCs is aimed at stabilising the FX, stem the rampant cases of leakages and illicit money transfers out of the country.

Consequently the CBN will from November 1, discontinue the sale of foreign exchange to the BDCs that had not availed it, the BVNs of all its directors.

Kelvin Amugo, director, financial policy and regulation department, CBN, said in circular that any authorised FX dealer that failed to provide the required information in its returns or provided a wrong BVN would be penalised and this might include determination of the FX dealership authorisation.

HOPE MOSES-ASHIKE