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:
- 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.
- Minimum Capital Requirement: BDCs must have a minimum capital base of N35 million (approximately $95,000) to operate.
- Maximum Daily Transaction Limit: BDCs are allowed to buy and sell foreign exchange up to a maximum daily limit of $10,000 per customer.
- 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.
- Reporting Requirements: BDCs must submit daily reports to the CBN, including details of transactions, customers, and turnover.
- 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).
- 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:
- Reduce the dominance of BDCs in the foreign exchange market, allowing other players to participate.
- Improve transparency and accountability in the foreign exchange market.
- Enhance the efficiency of foreign exchange transactions.
- 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.