Cbn new policy on bureau de change

You're referring to the Central Bank of Nigeria's (CBN) new policy on Bureau De Change (BDC) operators. Here's a summary of the key points:

Effective Date: The policy took effect from January 15, 2020.

Objective: The CBN aimed to improve the efficiency and transparency of the foreign exchange market, as well as reduce the dominance of BDCs in the market.

Key Provisions:

  1. Licensing: BDCs must obtain a new license from the CBN, which will be valid for a period of three years. Existing BDCs must renew their licenses within six months.
  2. Minimum Capital Requirement: BDCs must have a minimum capital base of N35 million (approximately $95,000) to operate.
  3. Maximum Daily Transaction Limit: BDCs are allowed to buy and sell foreign exchange up to a maximum daily limit of $10,000 per customer.
  4. Commission Rate: BDCs are allowed to charge a commission rate of 2% on transactions, with a minimum commission of N2,000 (approximately $5.50) per transaction.
  5. Reporting Requirements: BDCs must submit daily reports to the CBN, including details of transactions, customers, and turnover.
  6. Compliance with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Regulations: BDCs must comply with AML/CFT regulations, including the submission of suspicious transaction reports (STRs) to the Financial Intelligence Unit (FIU).
  7. Penalties for Non-Compliance: BDCs that fail to comply with the policy may face penalties, including fines, suspension, or revocation of their licenses.

Impact:

The new policy aims to:

  1. Reduce the dominance of BDCs in the foreign exchange market, allowing other players to participate.
  2. Improve transparency and accountability in the foreign exchange market.
  3. Enhance the efficiency of foreign exchange transactions.
  4. Reduce the risk of currency manipulation and speculation.

Overall, the CBN's new policy on BDCs is designed to promote a more stable and efficient foreign exchange market, while also reducing the risks associated with BDC operations.