The Central Bank of Nigeria (CBN) has released guidelines
for the sale of foreign exchange (Forex) by Bureau De Change (BDC) operators
within the country.
CBN said the guidelines will enhance the regulatory
framework for the operations of BDCs as part of the ongoing reforms of the
Nigerian foreign exchange market.
The apex bank disclosed this on Friday in a document titled
‘Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations
in Nigeria’.
A BDC is a company licensed by the CBN to carry out only
retail foreign exchange business in Nigeria.
According to the CBN, the guidelines revise the permissible
activities, licensing requirements, corporate governance and anti-money
laundering/combating the financing of terrorism (AML/CFT) provisions for BDCs.
“It also sets out new record-keeping and reporting
requirements, among others,” the financial regulator said.
“No person shall carry on the business of BDC in Nigeria
except with the prior authorization of the CBN.”
According to the circular, commercial, merchant,
non-interest, and payment service banks shall not be allowed to participate in
the ownership of BDCs — directly or indirectly.
Also, CBN said other financial institutions (OFIS),
including holding companies and payment service providers are not permitted to
own BDCs.
Other ineligible entities, the apex bank said, include
non-governmental organisations, serving staff of financial services regulatory
and supervisory agencies, governments at all levels, public officers, and
cooperative societies, among others.
‘CUSTOMERS WITH $10,000 AND ABOVE MUST DECLARE SOURCE OF FX’
CBN said sellers of the equivalent of $10,000 and above to
BDCs are required to declare the source of the foreign exchange “and comply
with all AML/CFT/CPF regulations and foreign exchange laws and regulations”.
“Customers may transfer foreign currencies from their
individual domiciliary accounts with Nigerian banks to BDCs,” the apex bank
said.
“All digital/transfer purchases of foreign currencies shall
be credited to the BDC’s Nigerian domiciliary account.
“Payments for all digital/transfer purchases of foreign
currency by a BDC shall be by transfer to the customer’s Naira account. If the
customer is non-resident (whether Nigerian or not), a BDC may issue the
customer a prepaid NGN card.
“Where such a card is issued, relevant maximum credit and
cumulative limits, in line with relevant Know Your Customer requirements, shall
apply.
“Payments to customers for cash purchases of foreign
currency, the equivalent of above USD500, shall be by transfer to the customer’s
Naira bank account.”
If the customer is a non-resident (whether Nigerian or not),
according to the circular, a BDC shall issue the customer a prepaid naira card.
Where such a card is issued, CBN said relevant maximum
credit and cumulative limits, in line with relevant know your customer (KYC)
requirements, shall apply.
SALE OF FOREIGN CURRENCY
The financial regulator said forex sales by BDCs must fall
within the scope of personal travel allowance (PTA), and business travel
allowance (BTA), “provided that a person who receives BTA on behalf of a
non-individual entity shall not be entitled to PTA for the same period”.
Others listed by CBN include payment of medical bills,
payment of school fees, and the repurchase of unused naira from a non-resident
from whom the BDC had sourced foreign currency in the course of the visit.
‘75% OF FX SALE BY BDCS MUST BE TRANSMITTED ELECTRONICALLY’
A beneficiary of BTA or PTA shall receive up to 25 percent
of the foreign currency in cash, according to the CBN, and the remaining 75
percent shall be transferred to the customer electronically (to the customer’s
Nigerian domiciliary account or prepaid card).
“Payments for all sales of foreign exchange by BDCS shall be
by transfer to the BDC’s Naira account,” CBN said.
However, the apex bank said beneficiaries of BTA or PTA of
$500 or less can receive the forex in cash.
In the same vein, the financial regulator said payments to
customers for cash purchases of forex of the equivalent of $500 and below may be
made in cash.
Furthermore, CBN said BDC operators can not engage in street
trading, maintenance of any type of account for the public, and opening or
maintaining any account with any financial institution outside Nigeria.
They are also banned by the CBN from engaging in offshore
business, financing political activities, and selling FX on credit to
customers.
The apex bank restricted the BDCs from dealing in gold or
precious metals, granting loans, as well as international inward transfers
(except for operators that serve as cash-out points for International Money
Transfer Operators).
CBN also said the minimum capital requirement for tier 1
BDCs is N2 billion and N500 million for tier 2 BDCs.
The financial regulator raised the minimum capital
requirement from N35 million previously set for all BDCs.
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