- BDC Operators Granted Six-Month Grace Period Amid Compliance Challenges
- New Capital Requirements Introduced to Reform Foreign Exchange Market
The Central Bank of Nigeria (CBN) has extended the deadline for the recapitalisation of Bureau De Change (BDC) operators from December 3, 2024, to June 3, 2025, granting operators additional time to meet the new capital requirements.
The announcement was made by Aminu Gwadabe, President of the Association of Bureaux De Change of Nigeria (ABCON), during an emergency virtual meeting attended by over 220 CBN-licensed BDCs, council members, and other stakeholders. The extension was attributed to the low level of compliance among BDC operators with the new capital requirements.
Gwadabe commended the CBN for its responsiveness and reaffirmed ABCON’s commitment to ensuring members meet the new standards. “The CBN is willing to partner with BDCs to ensure a seamless recapitalisation process. We send a message of unity, collaboration, and opportunities to our members,” he said.
Recapitalisation Guidelines
Under the revised CBN guidelines, BDCs are now classified into two tiers:
- Tier-1 BDCs: Required to raise a minimum capital of N2 billion, allowing them to operate nationwide, establish branches, and appoint franchisees.
- Tier-2 BDCs: Must raise N500 million and can only operate within a single state, with a maximum of five branches.
The recapitalisation initiative aims to enhance the BDC sector’s efficiency and strengthen its role in stabilising Nigeria’s foreign exchange market.
Operational Restrictions and Licensing
The new regulations outline specific licensing, operational, and anti-money laundering (AML) provisions for BDCs. Notable restrictions include:
- Prohibition of commercial banks, financial holding companies, and regulatory agency staff from holding BDC licences.
- Minimum distance requirements of one kilometre between branches for Tier-1 and Tier-2 operators.
- Tier-1 BDCs are allowed to supervise franchisees and operate under unified branding, while Tier-2 BDCs cannot appoint franchisees.
The updated framework is part of the CBN’s broader reforms to promote transparency and financial stability within the foreign exchange market.
Future Outlook
The CBN’s decision underscores its commitment to balancing regulatory reforms with industry realities. Operators are urged to leverage the additional time to ensure compliance while embracing the growth opportunities the reforms present.
