Amid the ongoing volatility of the Naira against the US dollar in the foreign exchange market, the Central Bank of Nigeria (CBN) has announced its intention to implement new guidelines for Bureau De Change (BDC) Operators in Nigeria, including potentially halting street trading.
The CBN revealed this on Friday through its draft Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria.
Under the proposed guidelines, the CBN aims to increase the minimum capital requirements for Tier 1 and Tier 2 BDC licenses to N2 billion and N500 million, respectively. This marks a departure from the previous requirement of N35 million for a general license.
A Tier 1 BDC would be permitted to operate nationally, establish branches, and potentially appoint franchisees, subject to CBN approval. Additionally, Tier 1 BDCs, acting as franchisors, would be responsible for supervising their franchisees, who must adhere to the franchisor’s branding, technology platform, and operational standards.
On the other hand, a Tier 2 BDC would only be authorized to operate within a single state or the Federal Capital Territory (FCT), with a maximum of three locations – a head office and two branches, subject to CBN approval. Tier 2 BDCs would not be allowed to appoint franchisees.
This initiative follows a crackdown on illegal BDCs in Abuja, Lagos, Kano, and Ibadan by the Economic and Financial Crimes Commission (EFCC) aimed at stabilizing the Naira against the USD.
As of the close of business on Friday, the Naira experienced a depreciation of N1,665.50 per US dollar from N1,571.31 on Thursday at the FMDQ market, while in the parallel market, it traded between N1,750 and N1,800 per USD on Friday compared to N1,680.00 on Thursday.
Despite various foreign exchange interventions by the CBN in recent months, Nigeria’s foreign exchange crisis continues to persist.
