The Central Bank of Nigeria is thinking about raising the minimum capital requirement for Bureau De Change operators to N2 billion for Tier 1 and N500 million for Tier 2 licenses.
Previously, currency operators were required to pay N35 million for a general license.
These proposed changes are outlined in a draft document titled “Revised Regulatory And Supervisory Guidelines For Bureau De Change Operations In Nigeria” released by the central bank on Friday.
The new guidelines introduce various updates to the regulations for BDC operations in the country and will come into effect on a date determined by the CBN if approved.
In recent times, currency operators have faced significant criticism due to the sharp decline of the naira against the dollar.
Government officials have placed the blame on black market operators for this decline, despite the ongoing challenge of liquidity.
Just this week, the Economic and Financial Crimes Commission arrested more than 250 BDC operators in Abuja, as well as many others in different states across the country.
The central bank is implementing a two-tier license for BDC operators in the country as part of the minimum capital requirements.
The guidelines read, “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.
“Also, a Tier 2 BDC is authorised 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.”
“Under Tier 1, operators are expected to have N2bn as minimum share capital while also depositing a Mandatory Caution Deposit of N200m.
“The application and licence fee is also N1 million and N5 million respectively.
“Under Tier 2, operators are expected to have N500 million as minimum share capital while depositing a Mandatory Caution Deposit of N50 million. The application and licence fee are also N250,000 and N2 million respectively.”
The central bank also mentioned that the required minimum capital for BDCs, as well as any additional capital injections, will need to be verified by the CBN.
