NEWS: BDCs Respond to CBN’s Requirement, Gives Conditions to Operate New Guideline

The Association of Bureau De Change of Nigeria has reacted to the recent directive by the CBN to the Bureau De Change operators The earlier directive had suggested raising the share capital of operators to N2 billion and N500 million for Tier 1 and Tier 2 licenses. The president of the association said the proposed cautionary deposit is not global practice; neither are BDCs engaging in deposit-taking operations...READ FULL ARTICLE

Aminu Gwadabe, the president of the Association of Bureau De Change of Nigeria, has reacted to the proposed requirement recently issued by the Central Bank of Nigeria.

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He stated that if the suggested operating principles are implemented, association members will consider mergers.

ABCON president, Aminu Gwadebe said the BDCs are demanding a general license hold.

Photo Credit: Bloomberg, CBN

This comes after the CBN suggested raising the share capital of Bureau De Change operators to N2 billion and N500 million for Tier 1 and Tier 2 licenses, respectively.

As reported in a Punch report, a general licence formerly cost the currency operators N35 million.

The development, however, means that BDC license holders would be required to make caution deposits of N200 million for Tier 1 and N50 million for Tier 2, respectively.

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Speaking on the development, Gwadabe said the BDCs are demanding a general license hold.

He said:

As argued by the president of ABCON, BDCs are not conducting deposit-taking operations, which would provide depositors with a safety net in case of a bank failure.

He added that the suggested cautionary deposit is not a worldwide practice.

He said:

Gwadabe said that after zonal meetings of ABCON’s more than 5,000 members nationwide, a committee will be formed to discuss and determine the industry’s position regarding the CBN’s proposals.

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According to him, the central bank is sharing a draft framework for the BDC subsector for the first time to solicit feedback.

He claimed that their opinions are often not valued and not followed along. It praised the central bank for disclosing the draft as a result.

He added: Gwadabe added that the licenses for Tier 1 and Tier 2 BDCs, as well as other elements of the suggested rules, would be examined by ABCON’s members....READ FULL ARTICLE