CBN Orders BDCs to Reapply for Licenses

The Central Bank of Nigeria (CBN) has ordered the  Bureau De Change (BDC) operators to re-apply for new licenses

This was stated on Wednesday in a revised guideline for BDC operations, signed by Haruna Mustafa, director of the Financial Policy and Regulation Department at the bank.

The regulator also directed that BDCs meet the minimum capital requirements for the license category applied for within six months from the effective date of the guidelines.

“All existing BDCs shall: Re-apply for a new license according to any of the Tiers or license category of their choice as provided in the Guidelines,” it said.

The new regulatory requirements mandate that Tier-1 BDCs have a minimum capital base of N2 billion, while Tier-2 BDCs must have a minimum of N500 million.

The Apex bank set the application fee for a Tier-1 license is set at N1 million and N250 thousand for a Tier-2 license. Licensing fees are N5 million for Tier-1 and N2 million for Tier-2 BDCs.

The bank has also instructed BDCs to comply with these requirements within the next six months.

The new guidelines permit Tier-1 BDCs to operate across all 36 states and the FCT and to open franchises nationwide with CBN approval.

The updated regulations also prohibit BDCs from engaging in futures, options, and derivative trading, performing outward international transfers, receiving international inward transfers, and dealing in crypto assets or with entities that handle crypto assets, among other restrictions.

The new guidelines incorporate changes following the bank’s release of the Draft Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria in February.

The new guidelines eliminate the mandatory caution deposits of N200 million for Tier-1 and N50 million for Tier-2 license holders.

The CBN has also removed the non-refundable annual license renewal fees of N5 million for Tier-1 and N1 million for Tier-2 BDCs.