ABCON faults CBN’s ‘BVN-for-forex’ transaction rule

The Association of Bureau De Change Operators of Nigeria (ABCON) has faulted the decision of the Central Bank of Nigeria (CBN) to make the Biometric Verification Number a mandatory requirement for foreign exchange transactions.

With few days to the second deadline for registration in the ongoing BVN, the Central Bank of Nigeria (CBN) outlawed any foreign exchange transaction without valid BVN, with effect from November 1.

Besides, the apex bank said it will at the same date, discontinue sale of foreign exchange to Bureau De Change (BDC) operators, that did not avail it the BVN of all its directors.

ABCON, in a statement at the weekend, faulted the November 1 deadline given to BDCs, saying it is too close.
It also said that making BVN mandatory for foreign exchange transactions, so soon, without adequate publicity, training and other measures, would enhance activities of the parallel market operators and widen the gap between the official exchange rate and the parallel market exchange rate.

The return of the CBN directives on the use of BVN on sales of forex to BDC clients will lead to confusion and delay in the use of applicable HS Code for processing of ‘Form M’; cancellation of foreign credit lines by correspondents banks; increased mistrust between regulators and operators; and increasing misery level of majority of Nigerians already in a significant poverty level.

It will also lead to decline in public confidence in CBN’s ability to sustain  its macroeconomic objectives; set the pace for  growing foreign interference in Nigeria’s  monetary policies; loss of jobs; and increased fraud and other related financial crimes,” the statement noted.

The association noted that while it is not totally opposed to the use of the BVN for foreign transactions, it believes that the take off date is too early for such policy, in view of the preparations required for smooth implementation.

Consequently, it recommended that the “CBN should resume training of BDC operators for the use of the BVN platform, and there should be massive sensitisation of the public on the new policy.”

It also recommended a CBN/ABCON taskforce to monitor compliance and eliminate non-compliant BDCs, adding this must be complimented with enhanced security surveillance at the airports and boarders.

Other recommendations include the harmonisation of the different operational guidelines by the CBN and the National Financial Intelligence Units (NFIU); and review of the scope of BDC operations as defined by the CBN guidelines to reflect current market realities.

CBN Director of Financial Policy and Regulation, CBN, Kevin Amugo, in a statement, said the directive has become necessary as the regulator continues its efforts to stabilise the forex market, stem the rampant cases of forex leakages and illicit money transfers out of the country.

All banks and licenced BDCs operating in Nigeria, as well as the general public are, therefore put on notice that with effect from November 1, 2015, all customers desiring to purchase forex through all available channels in Nigeria must provide their BVN, which shall be validated by the CBN authorised forex dealer through the Nigerian Interbank Settlement System platform before the transactions are consummated.

Any authorised forex dealer that fails to provide the required information in its returns or provides a wrong BVN would be penalised and this may include the termination of the forex dealership authorisation,” Amugo said.