Bureau De Change (BDC) operators have commenced discussions on mergers and acquisition (M&A) in order to meet the recapitalisation deadline set by the Central Bank of Nigeria (CBN).
Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON), disclosed this exclusively to BusinessDay. He said “discussion, engagement and sensitisation are ongoing across zones.”
The CBN has extended the deadline for the recapitalisation of BDC operators from December 3, 2024, to June 3, 2025.
“I therefore urge my members to adopt and embrace the Association’s propagation of mergers to meet up the extended deadline of the recapitalisation process before the extension in June, 2025,” he said.
Responding to the apex bank’s waiver of 2025 non-refundable licence renewal, Gwadabe said, “on behalf of the entire members of the Central Bank licensed Bureaux de change operators I want to say a big thank you to the management of the Central Bank for the annual license renewal amnesty extended to our members.”
He said it also underscored the Central Bank management commitment to ensuring the implementation of the new CBN regulation 2024 on BDCs new financial capitalisation requirement.
Read also: CBN waives 2025 license renewal fee for BDCs
Under the new CBN guidelines, Tier-1 BDCs are required to raise a minimum capital of N2 billion to remain operational, while Tier-2 BDCs must raise a minimum of N500 million. Tier-1 BDCs will be permitted to operate nationally, while Tier-2 BDCs will only be allowed to operate within one state of the Federation.
The capital raising initiative is part of the CBN’s reforms aimed at repositioning the BDC sector to better fulfill its role in Nigeria’s foreign exchange market. The new guidelines were issued after consultations with stakeholders and in line with the powers vested in the CBN by Section 56 of the Banks and Other Financial Institutions Act (BOFIA) 2020.
The revised guidelines introduce new licensing requirements, categorize BDCs into Tier-1 and Tier-2 groups, and update the permissible activities, financial, corporate governance, and anti-money laundering (AML), counter-financing of terrorism (CFT), and combating the financing of proliferation (CPF) provisions for BDCs.
According to the new guidelines, Tier-1 BDCs are allowed to operate in any state within the Federation, including the Federal Capital Territory (FCT), and may establish branches and appoint franchisees in any state or the FCT, subject to CBN approval. They must maintain a minimum distance of one kilometre between their branches, as well as between their branches and franchisees. Tier-1 BDCs are permitted to exercise oversight over their franchisees, who can adopt the franchisor’s name, logo, branding, technology platform, and regulatory requirements.
On the other hand, Tier-2 BDCs are restricted to operating within one state or the FCT, may establish up to five branches in their area of operation (with CBN approval), and are required to maintain a minimum distance of one kilometre between their branches. However, Tier-2 BDCs are not allowed to appoint franchisees.
The new rule also prohibits certain entities, including commercial, merchant, non-interest, and payment service banks, financial holding companies, other financial institutions (OFIs), International Money Transfer Operators, payment service providers, and staff members of financial services regulatory and supervisory agencies, as well as regulated financial services providers, from holding a BDC licence.
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