The Central Bank of Nigeria (CBN) is contemplating a substantial hike in the minimum share capital requirements for Bureau De Change (BDC) operators, according to a draft of the REVISED REGULATORY AND SUPERVISORY GUIDELINES FOR BUREAU DE CHANGE OPERATIONS IN NIGERIA.
Under the proposed guidelines, the CBN plans to introduce a two-tier license system for BDC operators, with Tier 1 covering national operations and Tier 2 limited to a single state or the Federal Capital Territory (FCT).
For Tier 1 operators, the minimum share capital requirement would be set at N2 billion, while Tier 2 operators would need to have a minimum share capital of N500 million. Additionally, both tiers would be required to deposit mandatory caution deposits, with Tier 1 operators depositing N200 million and Tier 2 operators depositing N50 million.
The application and license fees would also differ for each tier, with Tier 1 operators expected to pay N1 million for application and N5 million for a license, while Tier 2 operators would pay N250,000 for application and N2 million for a license.
Furthermore, BDC licenses would be subject to annual renewal, contingent upon compliance with regulations and payment of an annual non-refundable license renewal fee.
The proposed increase in capital requirements has sparked opposition from the Association of Bureau De Change Operators of Nigeria (ABCON), which advocates for industry consolidation instead of recapitalization. The Federal Government has also suggested reducing the number of BDCs from 5000 to 200 to enhance regulatory oversight and address irregularities in the forex market.
If implemented, the new guidelines could lead to significant consolidation within the BDC sector, as operators may opt for mergers and acquisitions to meet the higher capital requirements. The CBN’s objective behind these regulatory adjustments is to sanitize the black market for forex trades, strengthen oversight, and curb unauthorized transactions, as part of broader efforts to stabilize the forex market and ensure compliance.
