The Central Bank of Nigeria (CBN) has unveiled plans to implement new regulations that would impose substantially higher minimum capital requirements on Bureau de Change (BDC) operators across the country.
Under the proposed guidelines, operators seeking Tier 1 licenses would be mandated to maintain a minimum share capital of N2 billion, with an additional requirement of N200 million as Mandatory Caution Deposit.
Similarly, Tier 2 license applicants must possess a minimum share capital of N500 million, alongside N50 million as Mandatory Caution Deposit.
These recent revisions mark a change from the previous requirement of N35 million for a general license. The CBN’s move is outlined in the Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria – Exposure draft.
According to the CBN, the guidelines revise the permissible activities, licensing requirements, corporate governance and anti-money laundering/combating the financing of terrorism (AML/CFT) provisions for BDCs.
Tier 1 BDCs, authorized to operate nationally and establish branches, are required to submit a N1 million application fee and a N5 million license fee. Moreover, they are permitted to appoint franchisees, subject to CBN approval, and exercise supervisory oversight over them.
Tier 2 BDCs, restricted to operating within a single state or the Federal Capital Territory (FCT), must pay a N250,000 application fee and a N2 million license fee. They are allowed a maximum of three locations, comprising a head office and two branches, without the option to appoint franchisees.
The central bank emphasized that the prescribed minimum capitalization for BDCs, coupled with any supplementary capital infusions, requires validation by the CBN.
Furthermore, BDC licenses are subject to annual renewal, determined upon compliance with the relevant laws and regulations, and payment of the non-refundable annual license renewal fee, set at N5 million for Tier 1 operators and N1 million for Tier 2. Once approved, the updated guidelines will take effect on a date stipulated by the CBN.
