Forex: 3,239 BDCs access $520m in four weeks

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The 3,239 bureaux de change (BDCs) approved by the Central Bank of Nigeria (CBN) got $520 million from the apex bank dollar interventions in the last four weeks, The Nation has learnt.

The funds, followed $40,000 per BDC weekly dollar allocations from the CBN, in its commitment to deepen liquidity in the foreign exchange market.

A circular from the CBN confirmed the number of BDCs, even as the regulator has reiterated its commitment to continue funding key segments of the forex market.

The last review of approved BDCs was in January when the CBN approved licences of 3,147 operators and 71 Finance Houses that met its N35 million and N100 million mandatory capital bases.

The reviewed BDCs’ list was the first since May 29, lat year when the apex bank approved 2,998 operators to meet the foreign exchange needs of customers at the retail-end of the market.

The CBN also approved 71 Finance Houses licences, from previous 65 operators, created to operate at the middle tier of the financial system and cater for the financial needs of the Micro, Small and Medium Enterprises (MSMEs).

The reforms in the Finance Houses sector have been ongoing for years. The CBN, to sanitise the sub-sector, revoked the licences of 208 finance companies and cancelled the approvals-in-principle of 462 others.

The reforms, the CBN said, were made to have Finance Houses that were strong. The CBN said it woul continue to sanction Finance Houses that operate without licences.

The CBN said the new approvals in BDCs and Finance Houses sectors was in line with its plan to deepen the foreign exchange market by getting more operators involved in the retail end of the market.

Earlier, the CBN refunded almost N100 billion mandatory caution deposits to all the BDCs, after it stopped operators from accessing foreign exchange from official windows.  Each licensed BDC received N35 million from the apex bank.

Another circular signed by CBN Director, Financial Policy & Regulation, Kelvin Amugo, said the decision was reached, following recent development  in the operations of BDCs in the economy. He added that the regulator will retain the N1 million licensing fee paid by each of the operators.

The Association of Bureau De Change Operator of Nigeria (ABCON) President, Aminu Gwadabe, said the licensing of new BDCs was a positive development  expected to deepen dollar liquidity.

He said the CBN reviews the list of operators on quarterly, adding that the list has growed from over 1,400 to its current figure.

“There are more approvals expected. It is a welcome development,” he said.

According to him, ABCON believes that despite the challenges facing the economy, the CBN and BDCs will continue to work together and find sustainable solutions that can help the country wriggle out of the ongoing forex crisis and achieve full economic recovery.

“We have continuously assured the CBN and taken appropriate measures to ensure that purchased funds are disbursed to end users and for eligible transactions only. We also render weekly returns on purchases from the banks to Trade and Exchange Department of the apex bank.

‘’We also ensure strict compliance to the provisions of the anti-money laundering laws observance of appropriate Know-Your-Customer principles in the handling of forex transactions,” he said.

The ABCON chief reiterated the need for the public to deal with only CBN-licensed BDCs and for the public to report erring operator for sanction.

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