Business - Economy Updated: May 23, 2024

BDCs kick against new CBN licensing directives

By Felicia Abisola Olamiji
May 23, 2024

The Central Bank of Nigeria has mandated all existing Bureau De Change Operators to re-apply for new licenses in their preferred category.

However, BDC operators have rejected the new licensing guidelines, saying it is against best global practices.

Meanwhile, the CBN noted that those adjustments aimed to streamline BDC operations and enhance financial accessibility.

Reading the communiqué of the meeting, the Governor of the CBN, Olayemi Cardoso, said, “Members further observed the recent volatility in the foreign exchange market, attributing this seasonal demand, a reflection of the interplay between demand and supply freely functioning market system.”

The CBN also moved the mandatory caution deposit, which the industry players had kicked against.


CBN set up two new categories; Tier 1 and Tier 2 BDC licences.

According to the new guidelines, “A Tier 1 BDC: a. May operate in any State of the Federation and the Federal Capital Territory, b. May establish branches and appoint franchisees in any state and FCT, subject to the written approval of the CBN. c. Shall maintain a minimum distance of one kilometre between its branches, its branch and a franchisee, and between its franchisees. d. Shall exercise oversight on its franchisees. All franchisees shall adopt their franchisor’s name, logo, branding, technology platform and regulatory rendition requirements. 2 Classified as Confidential: e. Shall comply with the franchising standards prescribed in this guidelines.”

A tier 2 BDC Licence allows the operator to operate from only one state of the federation or the FCT, and it is allowed to establish five branches in a state of operation, subject to the written approval of the CBN.

Also, the BDCs (existing or new) would also be required to meet the capital requirements for their license category within six months.

However, Aminu Gwadebe, the President of the Association of Bureau de Change Operators of Nigeria, who spoke with Punch said, “The requirement is huge. It is not in line with global practices. Capitalisation in the UK is 50,000 pounds; in Kenya, it is $50,000 and so on. I don’t think it reflects global practice. A BDC is not a deposit taker; it is only buying and selling.


“Also, I’m afraid, we would not go the way of Algeria when they came with such policies and at the end of the day, every other player runs to the open market operations and at the end of the day, Algeria had to look for that open market to even determine their local currency exchange rate. We should be careful so that we will not throw away our experience, capacity and investment,” he warned.

According to the ABCON president, the deadline given to BDCs is short.

“When you are giving other sectors, one year, or two years, why the rush with the sub-sector? The deadline is quite short. It is not feasible and then we should also guide against what we are trying to avoid. The CBN in its mind is checkmating money laundering and we may meet money laundering in the future,” he argued.





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Felicia Abisola Olamiji

  A graduate of English Language from Olabisi Onabanjo University, passionate about learning new...

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