Following the licensing of 82 Bureau de change in the country, the Central Bank of Nigeria (CBN) is working towards increasing the number of licensed operators, LEADERSHIP has learnt.

Findings have shown that more than 100 BDCs are expecting to be on the second batch of licensing.

Recall that in May 2024, the CBN introduced a new capital structure for BDC operators, raising the minimum requirement to N2 billion for a Tier 1 license and N500 million for a Tier 2 license, compared to the previous N35 million threshold.

While Tier 1 operators are allowed to operate nationwide, Tier 2 BDCs are limited to operations within a single state. The deadline elapsed in June last year and out of the over 2000 licenced BDCs only 82 met the recapitalisation deadline, in a move to sanitise the industry and ensure that they play a more effective and credible role in Nigeria’s foreign exchange market.

The CBN had argued that weak capitalisation, poor governance and regulatory arbitrage among BDCs undermined market confidence and contributed to distortions in the retail end of the foreign exchange market.

Two months after the list of 82 was released, BDC operators say they are expecting more licenses to be issued by the end of next month after the verification of the capital of over 100 BDCs.

President of the Association of Bureau de Change Operators in Nigeria (ABCON) Aminu Gwadabe, while commending the CBN noted that the capital verification of over 100 bureaux de change have been conducted nationwide.

“After the release of the first set, they carried out capital verification nationwide. Maybe on or before the end of next month, the list of those they did capital verification for will be out. They are working on that seriously to ensure that many bureau de change are on board. That is really commendable,” he said.

This is coming after the CBN permitted licensed BDC operators to access foreign exchange from the Nigerian Foreign Exchange Market (NFEM) through authorized dealer banks.

The move, which is aimed at improving foreign exchange liquidity in the retail segment of the market and meeting the legitimate needs of end users, allows the 82 BDCs to purchase foreign exchange from the NFEM through any authorised dealer of their choice at the prevailing market rate.

“Authorised Dealers are required to complete the necessary KYC and due diligence for their BDC clients in line with applicable regulations and the internal risk management framework. Upon completion of these requirements, foreign exchange may be sold to BDCs for utilisation in line with the existing BDC Guidelines, subject to a maximum of USD150,000 per week for each BDC.

“All licensed BDCs shall ensure the timely and accurate submission of returns to the Central Bank electronically, and in accordance with extant regulations. Any unutilised balances are expected to be sold back to the market within 24 hours (BDCS are not permitted to keep funds purchased from NFEM in their positions).” The CBN circular had read. (LEADERSHIP, but headline rejigged )

Update news