 has introduced fresh regulations limiting Bureau de Change (BDC) operators to purchasing foreign exchange from only one authorized dealer per week.){kind=link}
The Central Bank of Nigeria (CBN) has introduced fresh regulations limiting Bureau de Change (BDC) operators to purchasing foreign exchange from only one authorized dealer per week.
The directive, issued in a circular signed by W.J. Kanya, Acting Director of the Trade and Exchange Department, also requires BDCs to adhere strictly to Know Your Customer (KYC) procedures.
As part of the new policy, each BDC can buy a maximum of $25,000 per week from its chosen authorized dealer bank.
“A BDC shall approach its preferred Authorized Dealer Bank (ADB) and can only procure the said amount from that bank in a week. Any breach of this condition will attract appropriate sanctions,” the circular stated.
The CBN further directed that the selling rate from authorized dealers to BDCs must align with the prevailing daily rate at the Nigerian Foreign Exchange Market (NFEM) window.
Additionally, BDCs are allowed to resell foreign exchange to end-users at a margin not exceeding one percent above the purchase rate. This margin applies to all funds retailed by BDCs, irrespective of their sources.
To ensure compliance, authorized dealer banks must submit weekly reports detailing their FX sales to BDCs. Likewise, BDCs are required to provide daily updates on their FX purchases and sales through the Financial Institutions Forex Reporting System (FIFX).
The CBN specified that funds acquired by BDCs should only be used for designated transactions such as Business Travel Allowance (BTA), Personal Travel Allowance (PTA), overseas school fees, and medical expenses. The maximum disbursement per transaction is capped at $5,000 per quarter.
BDC operators must also maintain records of all transactions, including the Bank Verification Number (BVN) of end-users and endorsements in the beneficiary’s international passport.
Furthermore, both authorized dealer banks and BDCs must comply with Anti-Money Laundering regulations and KYC protocols.
The CBN warned that any entity found diverting funds or violating the guidelines would face penalties, including the suspension of their operating licenses.