The Central Bank of Nigeria (CBN) says it has revoked licences of bureau de change (BDC) operators involved in unwholesome practices.
Olayemi Cardoso, CBN governor, spoke at the Vanguard Economic Summit, themed ‘Reforms in the Era of Global Economic Uncertainties: Whither Nigeria?’ on Thursday.
On May 22, the apex bank issued regulatory guidelines for BDC operations after consultation with stakeholders—three months after releasing draft revised regulatory and supervisory guidelines for the operators.
Represented by Blaise Ijebor, CBN’s director of risk management department, Cardoso said that by issuing the guidelines, the bank is working to address the challenges of BDC in the foreign exchange (FX) market.
“To this end, we have developed revised regulatory and supervisory guidelines for BDC operations in Nigeria. This is aimed at ensuring that BDCs play the role that they have been envisioned to play in the foreign exchange market.
“In addition, we have also revoked the licence of BDCs, who, as it has been established, have been involved in unwholesome practices,” he said.
Other non-permissible activities are the retail sale of foreign currencies to non-individuals, except for business travel allowance (BTA), international outward transfers, off-shore business or maintaining foreign correspondent relationships with any foreign establishment, or opening or maintaining any account with any bank or financial institution outside Nigeria without the prior written approval of the CBN.
In the guideline, CBN also directed all BDCs to reapply for licences.
Speaking further at the event, the CBN governor said the bank will continue to be focused on increasing the flows of diaspora remittances into the economy through official channels to improve liquidity in the FX market.
“We are working closely with key stakeholders in these segments. And recently, we pushed this forward. We licenced 14 new international money transfer operators (IMTOs) to enhance competition, efficiency, and transparency in the FX market,” Cardoso said.
He said the bank remains committed to a transparent and functional FX market where price discovery is premised on market-driven frameworks.
Cardoso expressed confidence that this would lead to the long-term stability of the naira.
