The Central Bank of Nigeria (CBN) has proposed new regulations that would significantly increase the minimum capital requirements for Bureau de Change (BDC) operators in the country to N2 billion and N500 million for Tier 1 and Tier 2 licenses.
This is a change from the previous requirement of N35 million for a general license.
This was contained in the Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria- Exposure draft.
“The Guidelines revises the permissible activities, licensing requirements, corporate governance and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CT) provisions for BDCs. It also sets out new record-keeping and reporting requirements, among others,” the publication said.
The updated regulations encompass numerous modifications to the guidelines governing BDC activities within the nation. Once approved, these updated guidelines will come into effect on a date determined by the CBN.
Tier 1 operators must maintain a minimum share capital of N2 billion and also submit a Mandatory Caution Deposit of N200 million.
The fee for application is N1 million, while the license fee amounts to N5 million.
“A Tier 1 BDC is authorized to operate on a national basis can open branches and may appoint franchisees, subject to the approval of the CBN.
A Tier 1 BDC (which is the franchisor) shall exercise supervisory oversight over its franchisees. All franchisees shall adopt their franchisor’s name, branding, technology platform, and rendition requirements,” the draft said.
In Tier 2, operators are required to possess a minimum share capital of N500 million and maintain a Mandatory Caution Deposit of N50 million.
“A Tier 2 BDC is authorized to operate only in one state or the FCT. It may have up to three locations – a head office and two branches, subject to approval of the CBN. It is not permitted to appoint franchisees,” the draft said
The application fee is N250,000, while the license fee amounts to N2 million.
The central bank also mentioned that the specified minimum capital requirement for BDCs, along with any additional capital infusion, will need to be confirmed by the CBN.
Also, BDC licences are renewable annually subject to compliance with laws and regulations applicable to BDCs and the payment of the non-refundable annual licence renewal fee, which is N5 million for Tier 1 operators and N1 million for Tier 2.
