The Central Bank of Nigeria (CBN) on Friday said it is considering raising the minimum capital requirements for Bureau De Change (BDC) operators to N2 billion for Tier 1 licenses while it would be N500 million for Tier 2 licenses.
The CBN made this announcement via a draft titled “REVISED REGULATORY AND SUPERVISORY GUIDELINES FOR BUREAU DE CHANGE OPERATIONS IN NIGERIA”.
The newly-proposed minimum share capital for Bureau De Change operators is huge given that it used to be N35 million for a general license.
“The updated regulations encompass numerous modifications to the guidelines governing BDC activities within the nation. Once approved, these updated guidelines will come into effect on a date determined by the CBN,” the draft read.
“Tier 1 operators must maintain a minimum share capital of N2 billion and also submit a Mandatory Caution Deposit of N200 million.
“The fee for application is N1 million, while the license fee amounts to N5 million.”
In Tier 2, the apex bank said operators will have to possess a minimum share capital of N500 million and maintain a Mandatory Caution Deposit of N50 million.
According to the draft, the application fee is N250,000, while the license fee amounts to N2 million.
The apex bank also stated in the draft that the specified minimum capital requirement for BDCs, along with any additional capital infusion, will need to be confirmed by the CBN.
The draft also pointed out that a Tier 1 BDC is authorized to operate on a national basis, it can open branches and may appoint franchisees, subject to the approval of the CBN.
“A Tier 1 BDC (which is the franchisor) shall exercise supervisory oversight over its franchisees,” it said.
“All franchisees shall adopt their franchisor’s name, branding, technology platform, and rendition requirements.
“A Tier 2 BDC is authorized to operate only in one state or the FCT. It may have up to three locations – a head office and two branches, subject to approval of the CBN. It is not permitted to appoint franchisees.”
On its operations, a BDC must verify customer identity, keep transaction records, connect to CBN systems, display rates clearly etc.
As regards the supervision, the CBN said specified regulatory returns must be rendered, records available for inspection and compliance with guidelines is required.
