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Bureau De Change operators consider merging as CBN proposes ₦2bn share capital

The President of the Association of Bureau De Change of Nigeria noted that the union is hoping the issuance of the new general license will be put on hold.

Bureau De Change operators eye merging as CBN proposes ₦2bn share capital [Daily Nigerian]

This was revealed in a recent statement by the President of the Association of Bureau De Change of Nigeria, Aminu Gwadebe, who added that the option of a merger was necessary if the proposed guidelines for their operations should go into effect.

Recall the CBN in its bid to control the country's forex market and also, put some sanity in the Bureau de Change industry had developed a fresh guideline titled ‘Revised Regulatory And Supervisory Guidelines For Bureau De Change Operations In Nigeria’.

The new guideline was released in a circular signed by Haruna Mustapha, director of Financial Policy and Regulation Department of the CBN and proposed an increase in the share capital of Bureau De Change operators to ₦2 billion and ₦500 million for Tier 1 and Tier 2 licences, respectively.

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Additionally, applicants for BDC licenses were required to make caution deposits of ₦200 million and ₦50 million for Tier 1 and Tier 2, respectively.

The apex bank noted that the guidelines were designed to enhance the regulatory framework amidst ongoing reforms in the foreign exchange market.

Before now, BDC operators were bound by the previous guideline that took effect in January 2016 which mandated them to pay a non-refundable application fee and licensing fee of ₦100,000 and ₦1 million respectively. The mandatory caution deposit was ₦35 million and the annual licensing renewal fee was ₦250,000.

With the revised guideline, Tier 1 operators have been instructed to deposit a caution fee of ₦200 million while the application and license fees will be ₦1 million and ₦5 million respectively with an annual renewal fee of ₦5 million.

For Tier 2 operators, a deposit of ₦50 million will be paid for caution, while the application and license fees will cost ₦250,000 and ₦2 million respectively, with an annual renewal fee of ₦1 million.

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While speaking on the development, Gwadebe noted that the union is hoping the issuance of the new general license will be put on hold. He advised that the CBN should halt the plan of issuing new licenses during the consolidation period and instead, allow the holders of the old licenses to come together and form more consolidated operations.

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