Forex ban: CBN begins refund of licence fees to BDC operators

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The Central Bank of Nigeria (CBN) has disclosed that it will soon begin to refund licence fees paid by Bureaux De Change operators following their ban from continuous trading in forex.

The Bank stated this in a circular released on Thursday on its website.

The CBN Governor, Mr. Godwin Emefiele, had announced the sales ban on Tuesday during the Monetary Policy Committee meeting.

“Further to the Monetary Policy Committee (MPC) briefing of July 27, 2021, the Central Bank of Nigeria (CBN) will commence the immediate refund of capital deposits and licencing fees (where applicable) to promoters who have pending Bureaux de Change (BDC) licence applications with the CBN,” the Bank said in the circular.

The apex bank had been faced with foreign exchange woes leading to the devaluation of the naira to N410 to the dollar at the official window from N379 previously held.

But at the parallel market, the naira has lost its value to over N503 to the dollar, despite issuing several warnings to speculators by Emefiele.

Promoters of BDC across the country have obligations to pay N35m to the bank and other fees.

The N35m is the minimum capital deposit for promoters to get licence.

With the new development, the apex bank said for a BDC promoter to access the refunds they must put forward their requests in writing to the “Director, Financial Policy and Regulatory Department” of the bank in Abuja.

The apex bank said the request must include a telex copy of the capital deposit of N35million.

Others include account details for the refund, “which should be the same as the account from which capital deposits originated, including the bank name; account name and account number.”

Also, the bank said it would require a copy of the bank draft/telex for payment of licensing fees of N1m.

“All Deposit Money Banks are hereby directed to henceforth stop accepting instructions from customers to transfer capital deposit of N35 million to the designated CBN account for the purpose of applying for BDC licence”, the apex bank added.

Meanwhile, the Association of Bureaux De Change (BDC) Operators of Nigeria (ABCON) said yesterday that its members that violated the CBN’s guidelines on foreign exchange (forex) sales will be identified for sanction.

In its maiden statement after the CBN stopped $10,000 weekly allocation per BDC and  licensing of new operators, ABCON said despite the current challenges, BDCs are still in business.

The ABCON President, Aminu Gwadabe, assured members of the public that BDCs are still providing forex services.

He said ABCON has always worked with the CBN to ensure proper working of the foreign exchange market.

He said the group will engage with the apex bank to address and resolve  all the issues that led  to the recent action, including identification and sanctioning of earring BDCs, where necessary.

He stressed that the recent pronouncement of the apex bank does not stop BDCs from providing forex services as allowed by  their operating licenses and also in their operating guidelines.

CBN Governor, Godwin Emefiele had announced at the close of the Monetary Policy Committee (MPC) meeting in Abuja Tuesday, that weekly allocation to BDCs will no longer be supplied to the operators over breach of operational guidelines.

Gwadabe said BDCs are licensed to provide retail foreign exchange services,  including buying from the public and also selling to end-users for allowable transactions namely Personal Travel Allowance (PTA), Business Travel Allowance (BTA), payment of medical and school fees.

“While the dollar sale from CBN had helped in enhancing supply, the fact remains that BDCs are empowered to source foreign exchange from other sources and also to provide various services to members of the public,” he had said.

“While the CBN has stopped dollar sale to BDCs, it has not cancel their operating licenses, or banned them from providing foreign exchange services to members of the public”, he added.

“At ABCON, we urge our members to see the CBN pronouncement as a wakeup call and opportunity to widen their customer base and deepen their business.

“In addition to this, and in view of the fact that BDCs have been very effective in ensuring stable exchange rate, ABCON will work with relevant stakeholders including law enforcement agencies to develop a National BDC Policy with the aim of enhancing the contribution of the BDC sub-sector to the nation’s economy,” he said.

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