Aminu Gwadebe, the President of the Association of Bureau De Change of Nigeria, has indicated that association members may contemplate merging should the suggested operational guidelines be implemented.
In a recently released draft document titled ‘Revised Regulatory And Supervisory Guidelines For Bureau De Change Operations In Nigeria,’ the Central Bank of Nigeria has suggested an adjustment in the minimum capital requirements for Bureau De Change operators. According to the proposal, Tier 1 license holders would be required to have a minimum capital of N2 billion, while Tier 2 license holders would need to maintain a capital of N500 million.
The currency operators were required to pay N35 million for a standard license in the past. Additionally, the central bank will now be instructing BDC license holders to submit security deposits of N200 million and N50
Gwadebe, said, “Definitely, that is why we are asking for the general license hold, where during that period of consolidation, no new licenses should be issued. They should allow the old licenses to come together and form those mega, consolidated operations in cash sale and ownership structure.”
As stated by the president of ABCON, the suggested precautionary deposit is not a common practice worldwide, and neither do BDCs participate in accepting deposits.
He said, “There are some absolute figures that we are going to review and give our recommendation on those figures because they are high and in some places, they are not even existent. If you are talking about cautionary deposits, there is nowhere in the world where a bureau de change is made to pay a cautionary deposit.
“Cautionary deposit is not a global practice. Even if that should happen, they should look at it. We are not deposit-takers like banks, where if a bank collapses, the depositors will have a fallback. We don’t have that risk.
“I understand that there may be some infractions with some BDCs but to put that amount is extremely high and it is not even a global practice.”
