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Tag: BDC

  • BDC: CBN mandates sellers above $10,000 to declare sources

    BDC: CBN mandates sellers above $10,000 to declare sources

    The Central Bank of Nigeria (CBN) has mandated foreign exchange sellers to Bureau De Change (BDC) of the equivalent of 10,000 dollars and above to declare their forex sources.

    Haruna Mustapha, Director, Financial Policy and Regulation Department of the CBN, said this in a revised regulatory framework to curtail excesses of BDCs and check uncertainty in the foreign exchange market.

    Mustapha said that such sellers would also be required to comply with all Anti-Money Laundering/Combating the Financing of Terrorism ( AML/CFT) regulations.

    He said that the guidelines would significantly enhance the regulatory framework for the operations of BDCs as part of ongoing reforms of the Nigerian foreign exchange market.

    According to him, the guidelines revises the permissible activities, licensing requirements, corporate governance and AML/CFT provisions for BDCs.

    “It also sets out new record-keeping and reporting requirements, among others,” he said.

    The News Agency of Nigeria (NAN) reports that the guidelines also specifies that no person shall carry on the business of BDC in Nigeria except with the prior authorisation of the CBN.

    It described BDC as a company licensed by the CBN to carry on only retail foreign exchange
    business in Nigeria.

    It banned commercial, merchant, non-interest and payment service banks, Other Financial Institutions (OFIs), including holding companies and payment service providers from promoting BDCs.

    It also precluded serving staff of financial services regulatory and supervisory agencies, serving staff of regulated financial services providers, governments at all levels, among others, from promoting BDCs.

    The guidelines permitted BDCs to acquire foreign currency from authorised sources like tourists, returnees from the diaspora and expatriates with foreign exchange inflows from work, travel, investment or their domiciliary accounts.

    Other permissible sources are International Money Transfer Operators (IMTOs), embassies, hotels that are authorised buyers of foreign currencies, the Nigerian Foreign Exchange Market (NFEM) and any other source that the CBN may specify.

    Read Also: CBN hikes BDC license fees to N2bn

    It warned the BDCs not to engage in street-trading, maintaining any type of account for any member of the public, or accepting any asset for safe keeping/custody.

    It said that the BDCs were also not permitted to take deposits from or grant loans to members of the public in any currency and in any form.

    “Retail sale of foreign currencies to non-individuals, except for BTA, international outward transfers, engaging in off-shore business or maintaining foreign correspondent relationship
    with any foreign establishment are also not permissible,” it said.

    (NAN)

  • BDC operators in hide and seek trading

    BDC operators in hide and seek trading

    • ABCON denies trading suspension

    The Economic and Financial Crimes Commission (EFCC) was in hot chase of Bureau de Change (BDC) operators yesterday 

    in what was described as efforts by the anti graft agency to arrest both sellers and buyers of forex.

    The raid followed the resumption of trading by BDC operators after an earlier purported pronouncement by the forex traders that their parent body, the Association of Bureau de Change Operators of Nigeria (ABCON) had called for suspension of forex trading forthwith. The announcement which was later refuted by the association delayed resumption of forex trading yesterday in Abuja for over three hours.  

    ABCON President, Dr. Aminu Gwadabe said the information on shutdown of forex operations by Abuja BDCs, was incorrect and never emanated from the national body or zonal offices of ABCON.

    He said: “We hope this letter finds you well. We are writing to provide clarification and dispel any misconceptions regarding recent rumors of a shutdown of forex transactions in Abuja. Contrary to these unfounded reports, we want to assure you and the public that this information is not from our central body and nether the zonal council”.

    According to Gwadabe, CBN-licenced BDCs are guided by the sector’s regulatory guidelines.

    He said: “As professional and licensed BDC operators Guided by the Central Bank of Nigeria regulation. We urge our members to be law abiding in the day-to-day activities in the financial markets, including foreign exchange activities and continue to operate smoothly and without interruption because no directive has been given by our Association.”

    According to him, addressing the misinformation promptly was to avoid unnecessary panic and confusion among the public, businesses, and investors.

    Gwadabe said the group will continue to engage with relevant authorities on the way forward for the forex market.

    According to CBN regulatory guidelines for BDCs, every BDC operator in Nigeria shall deal in banknotes and coins, plastic cards, and such other businesses as the CBN may approve from time to time.

    The rule is that the foreign currencies dealt in by a BDC shall be derived from private sources and such other sources which may include the CBN window as determined by the CBN from time to time for the purpose of funding Business Travel Allowance (BTA) and Personal Travel Allowance (PTA).

    Giving reasons why trading was delayed, an operator said they were frustrated by the rate at which the official exchange rate was catching up with their rate they were offering, saying,  “worried they would run out of business, the BDC union instructed its members to close shop on Thursday.

    Mallam Ibrahim at Wuse Zone 4 told The Nation that their union took the decision out of frustration when it became obvious that they couldn’t compete with the official rate.

    Speaking in pidgin English, Mallam Ibrahim said “The Naira just de go up. The official rate has fallen so much that it’s almost the same as what we offer here. There’s no profit in selling dollars anymore.”

    The shop closure only lasted for a few hours. As officials of the Economic and Financial Crimes Commission (EFCC) stormed Wuse Zone 4 to arrest both sellers and buyers of Forex.

    It was learnt that while the streets around the Forex market appeared deserted, transactions continued behind closed doors.

    When contacted again in the afternoon, Ibrahim said they had all gone into their offices to do business, but lamented that the rate had crashed compared with what it was yesterday. As at 4:30pm on Thursday, dollar was going for N1,450 Ibrahim said.

    Read Also: Tinubu to University unions: prioritise dialogue to avoid frequent strikes

    Corroborating what Ibrahim had said, another trader, Nura said he was operating from within the banking halls, adding that his clients send dollars to his account and he in turn transferred the Naira equivalent back to them.

    The narrowing Forex rate gap driven by several economic factors, has significantly reduced the potential profit margin for black market operators, rendering their activities less lucrative.

    The traders’ closure could have significant implications for the Nigerian foreign exchange market. While access to official channels for FX remains limited for many Nigerians, the black market has historically served as an alternative source, albeit at a premium. Their sudden shutdown could create challenges for individuals and businesses reliant on these unofficial channels.

    However, the development could also be seen as a positive sign for the CBN’s recent efforts to stabilize the foreign exchange market. The narrowing gap between official and black market rates suggests increased confidence in the official market, potentially reducing demand for alternative channels.

    The situation is fluid and could evolve rapidly. The CBN and ABCON are yet to issue official statements, and the long-term impact of the traders’ closure remains unclear.

  • Merger for BDCs, not recapitalisation

    Merger for BDCs, not recapitalisation

    Association of Bureau De Change Operators of Nigeria (ABCON) is seeking the merger of several Bureau De Change (BDC) operators not recapitalisation of the industry, the group announced yesterday.

    The recommendation is to effectively help its corporate governance and rules of engagements with the apex bank.

    The merger option was adopted for  class ‘A’ BDCs  in 2007/2008, which entitled them to $1 million weekly allocation with  N500 million capital base.

    The group called for similar business model through  mergers and consolidation rather than outright review of capital base of each operator.

    It said Central Bank  of Nigeria (CBN) to regulate emerged BDCs from the consolidation exercise.

    Each of the CBN-licenced BDCs is capitalised to the tune of N35 million and should be allowed to willingly consolidate among themselves.

    ABCON President, Alhaji Aminu Gwadabe, who broke the news in Lagos, said  the group never asked for upward review of N35 million mandatory regulatory approved capital base for each BDC, but a merger of at least 10 BDCs to form new capital of N350 million.

    Read Also: Central Bank of Nigeria appoints directors

    The move, he said, would  enhance the scope of operation and diversification of sources through various window and reduce regulatory pressures.

    He said merger of multiple BDCs into a stronger entity will  prepare them for higher role in the financial system, including handling of diaspora remittances or  other offshore funds  attracted to the economy to deepen forex access at the retail end of the market.

    Gwadabe said the merger of multiple commercial banks in 2004 consolidation exercise by the apex bank is an example the apex bank could adopt  for the BDCs to streamline their numbers and present an easily manageable operators for maximum impact in the foreign exchange market.

    He said: “ABCON rejects reports calling for BDCs recapitalisation by a section of the media. The media quoted us out of context and we are working to put a proper narratives”.

    Continuing, he said the BDCs is seeking multiple mergers within the industry to present a reduced number of operators for more effective regulation.

    “Instead of allowing each BDC to be recapitalised to the amount proposed by the Economic Advisory Committee which will likely lead to the extinction of many of our members as it happened in  2014 when an outright review of capital base was the only option.

    We also advised that the CBN should not issue any license during the period to avoid venture capitalist taking over the business from the already skillful operators.

    He said with over 40,000 Nigerians employed by the sub-sector, there was need  to support the BDC business for sustained economic growth and employment generation.

    Gwadabe said foreign currencies dealt in by a BDCs are derived from private sources and such other sources which may include the CBN window as determined by the CBN from time to time for the purpose of funding Business Travel Allowance (BTA), Personal Travel Allowance (PTA), School Fees Payment abroad, Medicals, mortgage, personal home remittances and subscription.

    He said ABCON has been for years, training Compliance Officers to ensure they are acquainted with what is required of them, especially on monthly rendition of results and  tracking illicit capital flows through compliance.

    According to Gwadabe, BDCs are complying with the rendition of suspicious transactions reports as directed by NFIU, CBN, and EFCC.

    He said BDCs are required to comply with all extant rules & regulations prescribed by the CBN, while the CBN closely supervises and monitors their operations.

    “In compliance with the provisions of Bank and Other Financial Institutions (BOFIA) as amended, every BDC renders returns to the CBN in prescribed format and within the deadline stipulated by the CBN. The records of the BDCs are made readily available to the CBN examiners as and when requested including carrying out customer due diligence, corporate governance and tax returns,” he said.

    He said that ABCON has over the years established itself as a key player in the BDC industry, and has also made several commitments and sacrifices to ensure that the sector continue to thrive despite all odds.

    “The recognition of the role of BDCs in Nigeria financial sector remains the first step to building a sustainable and viable forex market that is comparable to what is obtainable in other developed economies. But getting the Nigerian BDC sector to where it is desired to be demands hard-work, quality leadership, regulatory foresight and sound government policies,” he said.

  • ABCON, NFIU advise BDCs to hire Designated Compliance Officers

    •Hold anti-money laundering reporting training

    The Association of Bureaux De Change Operators of Nigeria (ABCON) and Nigeria Financial Intelligence Unit (NFIU) have advised Bureau de Change (BDC) operators to employ Designated Compliance Officers  to handle all compliance-related issues.

    The advise came at the end of a four-day joint nation-wide training/sensitization programme on Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) reporting for Bureaux de Change (BDC) operators by both institutions.

    The training, which has been ongoing since December 11, 2018, focused on the obligation of registering and filling reports on the NFIU goAML -Anti-Money Laundering portal. A session was held on  January 5, 2019 in Kano and another session held on January 22, 2019 in Abuja among others.

    As part of the NFIU/ABCON partnership, ABCON has taken the train-the-trainers training of the NFIU to the six geopolitical zones of the country in order to strengthen capacity for over 4,000 BDC operators nationwide.

    Speaking to financial journalists at the end of the training, ABCON President, Alhaji Aminu Gwadabe, said the anti-money laundering training is intended to familiarize BDC operators with the process of money laundering – the criminal business used to disguise the true origin and ownership of illegal cash – and the laws that make it a crime.

    Gwadabe said the policy on the recruitment of the Designated Compliance Officers by BDCs is  already being implemented by ABCON and remains part of the association’s vision to revolutionalise BDC operations in Nigeria for global competitiveness and transparency.

    He said that money laundering and terrorist financing pose not only a threat, but are enormous threats and challenges to the economy, security, and social life in Nigeria, the region and globally.

    In a statement by NFIU commending ABCON for the training, Ibrahim Pindar, said: “We wish to congratulate the ABCON on the attendance recorded on the concluded training of BDC operators on the key Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) obligation of registering and filling reports on the goAML -Anti-Money Laundering portal”.

    The NFIU advised ABCON to train BDCs regularly so as to cover AML/CFT knowledge-gap identified from most operators and also ensure that their members register on the goAML portal.

    NFIU recommended that: “Those trained by the NFIU team should be engaged by ABCON to train their members on continuous basis. Any change of Compliance Officer should promptly be reported to the NFIU. ABCON should ensure that the operators have alternates for their compliance officers for succession planning and continuity.”

    Gwadabe  said that the training was also meant to help BDCs maintain minimum standard of record keeping and increasing level of investors confidence for the economy.

    The training, Gwadabe added, will create awareness on the need to check money laundering and terrorist financing in this period of electioneering; ensure that BDCs are not used to launder funds by Politically Exposed Persons (PEPs). It will also upscale BDCs’ compliance with the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) for Banks and Other Financial Institutions in Nigeria Regulations, 2013.

     

     

     

     

  • $15,000 special Xmas intervention sale to BDCs begins tomorrow

    •CBN injects $210m into forex market

    The $15,000 weekly Yuletide special intervention foreign exchange (forex) sales to Bureau de Change (BDC) operators commences tomorrow, the Central Bank of Nigeria (CBN) has announced.

    In a statement, signed by CBN Director, Trade & Exchange Department, U. Abdullahi, he explained that with the approach of yuletide season and the resultant increase in the demand for Personal/Business Travel Allowances, the apex bank has in addition to the existing market days, Monday, Wednesday and Friday, introduced a special intervention day every Thursday. Each BDC operator will get  $15,000 commencing tomorrow.

    “ Consequently, all BDCs should note that the cut-off time for receiving Naira deposits into their respective bank accounts for the Thursday’s special intervention shall be 10am on the Thursday. All operators are hereby advised to ensure strict compliance with the provisions of the extant regulations on the disbursement of forex cash to their respective customers as any case of infraction will be appropriately sanctioned,”  Abdullahi said.

    In addition,  the CBN yesterday injected  $210 million into the inter-bank foreign exchange market.

    Authorised dealers in the wholesale segment of the market, in Monday’s sales, received the sum of $100 million, while the Small and Medium Enterprises (SMEs) and the invisibles segments were allocated the sum of $55million each.

    The CBN Director in charge of Corporate Communications Department, Isaac Okorafor, confirmed the figures and restated the Bank’s resolve to meet genuine customers’ request in the various segments of the market especially in the preceding period of the yuletide and in the New Year.

    The CBN Governor, Godwin Emefiele, while delivering the annual lecture of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, on Friday, had warned speculators not to bet against the Naira. Despite the uptick in the exchange rate last week, Emefiele said the Bank had enough reserve to defend the Naira.

    It will be recalled that on Friday, November 30, 2018, the Bank injected a total sum of $331.22million in retail Secondary Market Intervention Sales (SMIS) and CNY51.86 million in the spot and short-tenored forwards of the inter-bank foreign exchange market.

    Meanwhile, the naira on Tuesday, December 2, 2018 continued to exchange at an average of N365/$1 in the Bureau De Change (BDC) segment of the market.

  • How BDCs assist politicians to loot, by Magu

    Economic and Financial Crimes Commission (EFCC) Acting Chairman Ibrahim Magu revealed yesterday how Bureau de Change (BDC) operators aid corrupt practices of some politicians.

    Speaking at a meeting with the Association of Bureaux De Change Operators of Nigeria (ABCON) in Abuja, Magu said: “These politicians transfer looted funds from government accounts to BDC’s accounts; in 10, 20 millions in about 75 transactions in one day.

    “This is done with only paper work, no physical cash.

    “The BDC operators now take the money to the politician’s village and also buy properties for them in and outside the country.

    “They help clean up dirty money. When we start prosecuting them in every zone, others will sit up.

    “We all have the responsibility to clean this country. We must always do the right thing.

    ”We shall go to the airports and border points and deal with those who help these thieves,” the chairman said.

    He was quoted in a statement by Head, Media and Publicity, EFCC, Mr Tony Orilade.

    Magu warned that the agency would prosecute operators and bankers who failed to comply with laws guiding the financial regulating system.

    Acting President of the Association, Alhaji Aminu Gwadabe, commended the EFCC chairman for his determination in the fight against corruption in the country.

    He gave the assurance that about 5000 licenced members of the association were ready to collaborate with the commission in the fight against corruption.

    He said that the problem had always been with the unlicenced members of the association who were ready to cut corners and bend the rules of the game.

    “In Abuja alone, we have over 100,000 unregistered BDC operators.

    “These are the people giving us the bad name. We would need the EFCC to partner with us in sanitising the association,” he said.

  • BDC operator’s murder sparks violence in Lagos hotel

    •As masked men attack carpenter

    Violence erupted on Wednesday night at a hotel in Ebute-Meta on Lagos Mainland following the murder of a Bureau De Change (BDC) operator identified simply as Mohammed.

    It was gathered that Mohammed had escorted a colleague of his, also identified simply as Mohammed, to Exclusive Mansion Hotel at Ondo Street on Apapa Road to sell gold jewellery estimated at N300,000 to some clients.

    Mohammed’s supposed clients, The Nation gathered, had contacted him with the claim that they wanted to change a foreign currency and buy three-piece gold jewellery.

    The dealer was to meet them at a hotel in Orile Coker or at a bank on Costain-Apapa Road, both of which he reportedly rejected.

    Following persistent calls from the would-be clients, the dealer was said to have accepted to meet them at a new location, Exclusive Mansion Hotel, where he went in the company of Mohammed.

    The duo were reportedly taken to a room on the last floor of the hotel and presented the jewellery to the supposed buyers, said to be two men.

    But two suspected members of the gang came out of the toilet.

    The four men, suspected to be fraudsters and armed robbers, were said to have descended on the merchants, hitting them with bottles and other objects.

    While the dealer was said to have passed out and later resuscitated at a hospital, Mohammed reportedly died on the spot.

    A resident, Ishola Agbodemu, said news of the attack got to their colleagues around 8 p.m and they invaded the hotel.

    He said: “What happened was that the BDC operator and his friends were attacked by supposed clients they went to transact business with. I was among those who intervened. He was rushed to the hospital, where he was resuscitated.

    “The criminals killed his friend, whose name is also Mohammed. According to the victim, the people have been calling him since 12 p.m to come with three pieces of gold necklaces and an anklet at a hotel in Orile-Coker. He said he refused to go and then, they changed the location to a bank on Apapa-Costain Road, which he also refused to go.

    “Around 5 p.m, they called again that he should come to Exclusive Mansion Hotel on Ondo Street. So, he went with his friend and they were taken to a room on the last floor.

    “While they were in the room and had brought out the items, one of the men opened the toilet door and two others came into the room. They started hitting the traders with bottles. That was how his friend died on the spot.

    “He passed out and was revived at the Federal Medical Centre at Railway Compound. Around 8 p.m, the news of Mohammed’s death reached the Hausa community in Ebute-Meta and they mobilised to the hotel.

    “They broke into the premises, chased lodgers out and vandalised the hotel. It took the intervention of the Area “C” Police Command, Denton Police Division, voluntary vigilance groups and community leaders to restore calm.”

    Also, hooded armed men early Wednesday attacked a carpenter, Busari Ikusanu, at his Dawudu Lane, Ilogbo, Ebute-Meta home.

    The carpenter was reportedly macheted around 1.45 a.m when four masked men broke into his home.

    Although it was unclear if the attackers robbed Ikusanu of any valuable, it was gathered that the victim sustained head and arm injuries.

    Agbodemu, who decried insecurity in the neighbourhood, claimed the residents had reported the activities of a group of hooded men to the police and were yet to get any result.

    “The state of insecurity has been our concern for a long time. I have written series of letters to the Lagos State Police Command. We have reported the activities of this particular group of hooded men but nothing has been done,” he said.

    Police spokesman Chike Oti, a Chief Superintendent of Police (CSP), said three suspects were arrested in connection with the kiling at the hotel.

    Oti said: “We were alerted about the incident by the hotel management and our operatives swiftly responded to the distress to avoid escalation.

    “Already, three suspects are in our custody. I cannot say whether they are part of the group that attacked the traders or not. Investigation is ongoing and I can assure that more suspects would be apprehended.

    “On the man (who was attacked at his home by masked men, we have no record of it. No one incidented such a compliant.”

     

  • Naira gains marginally against dollar at parallel market

    The Naira on Wednesday gained marginally against the dollar at the parallel market in Lagos, the News Agency of Nigeria  reports.

    The Nigerian currency gained 50 kobo to close at N358, stronger than N358.5 traded on Tuesday, while the Pound Sterling and the Euro closed at N480 and N418.5 respectively.

    At the Bureau De Change (BDC) window, the naira closed at N360 to the dollar, while the Pound Sterling and the Euro closed at N480 and N418.5 respectively.

    The naira, however, appreciated at the investors’ window, closing at N361.45, stronger than N361.68 traded on Tuesday, while it was sold at N305.90 at the Central Bank of Nigeria official window.

    Meanwhile, Mr Godwin Emefiele, CBN Governor, said that Nigeria performed very well among emerging markets in Africa.

    Emefiele in an interaction with newsmen at the end of the Monetary Policy Committee (MPC) meeting in Abuja, added that the foreign exchange market had remained stable.

    According to him, the apex bank had enough buffers to defend the naira.

  • BDCs reject CBN’s dollar purchase order

    Bureaux de Change (BDCs) operators yesterday rejected Central Bank of Nigeria’s (CBN’s) directive that operators make at least three dollar purchases weekly or be sanctioned.

    The apex had also threatened to punish banks that fail to instantly sell foreign exchange (forex) to eligible travelers and boost dollar liquidity in the market.

    The new CBN’s moves followed last week’s depreciation of the naira against dollar, which saw the local currency closing at N366/$1 at the parallel market on Friday from N361/$1 sustained in nearly one year. The naira remained flat at the parallel market trading at N364/$1 for the first three trading sessions in last week before losing one naira on Thursday and Friday respectively to close the week at N366/$1 despite $310 million injected into the interbank foreign exchange market by the CBN.

    But when contacted, the Association of Bureaux De Change Operators of Nigeria (ABCON) rejected CBN’s mandatory dollar purchase order to BDCs. The group rather, asked the regulator to review BDC’s dollar purchasing rate to align with rate commercial banks’ buying rate.

    ABCON President, Aminu Gwadabe, said in a statement that CBN’s directive on BDCs should be put on hold. He said: “The CBN’s directive at this time of our operational difficulties is no doubt precarious and vague and was intended to emasculate a sector that has helped the system to stabilize and thus unacceptable”.

    The CBN had directed in a statement signed by its Acting Director, Corporate Communications, Isaac Okorafor, that: “All BDCs shall henceforth access forex from the CBN on Mondays, Wednesdays and Fridays. It is compulsory that all BDCs access forex at least three times weekly. Any BDC that fails to access the forex window at least three times weekly shall have its licence reviewed by the CBN”.

    The CBN’s goal, Okorafor said, is to ensure that eligible travelers are able to access foreign exchange for the Business Travel Allowances (BTA), Personal Travel Allowances (PTA), school fees payment and medical bills payment. It is also in line with its plan to deepen foreign exchange liquidity available in the market.

    Finding by The Nation also showed that CBN Governor, Godwin Emefiele and key CBN officials are expected to within this week, go on spot-checks in some unspecified branches of commercial banks to monitor compliance with directive on immediate dollar sale to travelers.

    Gwadabe insisted that the regulator should firstly, merge BDC dollar buying rate with that of commercial banks and also pay ABCON disbursement fees as it is practiced globally. For instance, Travelex also collects forex disbursement fees from the CBN.

    The ABCON leader urged BDC operators to remain calm and focused, ahead of and executive engagements with the CBN and ‘further communication soon’.

    Gwadabe therefore recommended that the CBN cuts the three market days for buying dollars to two at $30,000 per market day. He said: “The rate between the banks and BDCs should be merged for uniformity and fairness. A situation where the banks buy dollar from the CBN at lower rate than the BDCs is no helping the market stability drive. Besides, ABCON should be considered for disbursement fees like Travelex in the collection centres to ameliorate the new assignments”.

    BDC operators insisted that making Fridays a market day for dollar purchase and funding done same day will be difficult to achieve and therefore should be discouraged. Gwadabe assured the CBN of BDCs’ continuous support in enabling the regulator achieve its core mandate of ensuring exchange rate stability and liquidity access.

    He added that: “The BDC sector is confronted with many challenges such as multiple exchange rate,  abnormal bank charges, Value Added Tax (VAT) and Commission on Turnover (COT), parallel market operators and illegal International Money Transfer Operators (IMTOs), porous international boarders, complex documentation requirements and poor capacity/ skills of operators”.

    Continuing, he said: “For instance, the increasing difficulties arising from over regulation and complex documentation requirements that licensed BDC operators are facing in carrying out their daily legitimate operation remain worrisome. These hitches have negative impact on BDCs’ efforts toward compliance to statutory and regulatory requirements. For instance, six units within the CBN are involved with BDC regulations, supervision, licensing, monitoring, saying this  constitutes multiple regulation of a unit of the financial sub-sector that is only involved as a small market player”.

    He said a BDC operator is expected to render daily, monthly, quarterly, half yearly and annual returns to these various departments of the same corporate body, which could be very cumbersome, repetitive and time consuming for both the operator and the regulator.

    “ABCON is therefore using this opportunity to appeal to the CBN to take urgent steps to review the rate at which the dollar is sold to BDCs in order to boost ongoing recovery of the naira against dollar. Obviously, the BDC business has been badly affected by “uncompetitive rate as the CBN sells dollars to BDCs at higher rate compared to what it sells to commercial banks, yet both institutions target the same market segment and customers. The BDCs buy dollar from the International Money Transfer Operators (IMTOs) at N360/$1 and sell to end users at N361.5/$1 while the CBN sells to commercial banks at N357/$1 and the banks sell to end users at N360/$1,” he said. He urged the CBN to review BDC rate to align with that of the banks since both sectors serve the same customers.

    The ABCON boss also want the apex bank to make BDC transactions Value Added Tax (VAT) and Commission on Turnover (COT) exempt and reduce BDCs licence renewal payments.

  • ABCON seeks rate review, VAT exemption for BDCs

    •Group launches Naijabdcs.com portal

    The Association of Bureaux De Change Operators of Nigeria (ABCON) yesterday asked the Central Bank of Nigeria (CBN) to review the rate at which dollars are sold to bureau de change (BDCs) to enable the operators compete favourably with commercial banks.

    ABCON President, Aminu Gwadabe spoke during the official launch of www.naijabdcs.com meant to bring about price discover and transparency in the foreign exchange market. The portal launch was attended by representatives of the CBN, commercial banks, Economic and Financial Crimes Commission, Nigeria Financial Intelligence Unit, Travelex, over 3,500 BDC operators among others.

    Gwadabe said: “The BDC sector is confronted with many challenges such as multiple exchange rate,  abnormal bank charges, Value Added Tax (VAT) and Commission on Turnover (COT), parallel market operators and illegal International Money Transfer Operators (IMTOs), porous international boarders, complex documentation requirements and poor capacity/ skills of operators”.

    Continuing, he said: “For instance, the increasing difficulties arising from over regulation and complex documentation requirements that licensed BDC operators are facing in carrying out their daily legitimate operation remain worrisome. These hitches have negative impact on BDCs’ efforts toward compliance to statutory and regulatory requirements. For instance, six units within the CBN are involved with BDC regulations, supervision, licensing, monitoring, saying this  constitutes multiple regulation of a unit of the financial sub-sector that is only involved as a small market player”.

    He said a BDC operator is expected to render daily, monthly, quarterly, half yearly and annual returns to these various departments of the same corporate body, which could be very cumbersome, repetitive and time consuming for both the operator and the regulator.

    “ABCON is therefore using this opportunity to appeal to the CBN  to take urgent steps to review the rate at which the dollar is sold to BDCs in order to boost ongoing recovery of the naira against dollar.

     

    Obviously, the BDC business has been badly affected by “uncompetitive rate as the CBN sells dollars to BDCs at higher rate compared to what it sells to commercial banks, yet both institutions target the same market segment and customers. The BDCs buy dollar from the International Money Transfer Operators (IMTOs) at N360/$1 and sell to end users at N362/$1 while the CBN sells to commercial banks at N358/$1 and the banks sell to end users at N360/$1,” he said.

    He urged the CBN to review BDC rate to align with that of the banks since both sectors serve the same customers. “We also want the CBN to grant ABCON proposed trading platforms approval in principle. This will give ABCON and its technology partners the boost needed to kick-start the project. We also appeal to the CBN to issue Letter of Consent to our proposed training institute. This is going to be a boost to the current ABCON Management commitment to capacity building of its members which boost competency in the sector,” Gwadabe said.

    The ABCON boss also want the apex bank to make BDC transactions Value Added Tax (VAT) and Commission on Turnover (COT) exempt, reduce BDCs licence renewal payments and also expand beyond scope of transactions.

    Also speaking, former ABCON President, James Tifashe, said the group has all it takes to make the portal to be a leading voice in the reporting of financial markets. “The launch of www.naijabdcs.com is a great step in the right direction and ABCON should be commended,” he said.