CBN extends BDCs’ recapitalisation deadline by 6 months due to low compliance

• The Central Bank of Nigeria has extended the deadline for the recapitalisation of Bureau De Change operators to June 3, 2025
• The extension is due to low compliance from BDCs
• The new capital requirement is N2 billion and N500 million for Tier 1 and 2 BDCs, respectively

The Central Bank of Nigeria (CBN) has extended the deadline for the recapitalisation of Bureau De Change (BDC) operators by six months due to a low level of compliance.

The deadline to meet new capital requirements was extended from December 3, 2024, to June 3, 2025.

The recapitalisation deadline applies to existing BDCs, while new operators seeking licences have an indefinite timeline to obtain them.

President of the Association of Bureaux De Change of Nigeria (ABCON), Aminu Gwadabe, disclosed this during an emergency virtual general meeting held by ABCON for its members on Monday, November 25.

Over 220 CBN-licensed BDCs, ABCON council members, and other stakeholders attended the meeting as part of the association’s ongoing engagements with the CBN to facilitate a smooth recapitalisation process.

Gwadabe assured that ABCON members were committed to meeting the new capital requirements and will work with the CBN to ensure a seamless process.

He said, “The CBN is willing to partner with BDCs to ensure that the recapitalisation process is seamless. We are sending a message of unity, collaboration and opportunities to ABCON members to continue striving to meet the new capital requirements.

“We thank the CBN for listening and giving us this six-month extension.

“I want us to brace up and see the opportunities in the recapitalisation, which are immeasurable.”

Capital requirement across tiers

Gwadabe further noted that the CBN regulations governing the operations of BDCs have crucial provisions and empower BDCs to acquire foreign currency from various sources, sell foreign exchange, open both foreign currency and naira accounts with commercial or non-interest banks, and collaborate with their banking partners to issue prepaid debit cards.

The CBN had on May 22, 2024 released approved guidelines for BDCs’ operations after consultation with stakeholders, which took effect from June 3, 2024.

However, the recapitalisation exercise has recorded low compliance from BDCs due to financial requirements amid policy uncertainty, lack of clarity, and increasing naira depreciation.

In the guidelines, the CBN raised the capital requirement for tier-1 BDCs from N35 million to N2 billion, while tier-2 operators must recapitalise to N500 million.

The guidelines also specified that tier-1 BDCs will be permitted to operate nationally, while tier-2 operators can only operate within one state of the federation.

The new capital requirement was adopted to bolster and reposition the BDC sector so that it can better fulfill its role in the Nigerian foreign exchange market.

Forex crisis: CBN approves sale of $20,000 to BDCs at N1,590/$

Meanwhile, TheRadar reported that the Central Bank of Nigeria (CBN) announced the approval to sell $20,000 worth of foreign exchange (forex) to each of the 1,583 eligible Bureau De Change (BDC) operators at the official rate of N1,590/$.

The CBN said the move is to bolster the foreign exchange market, ease the pressure on the naira and meet the retail demand for eligible invisible transactions, which are transactions related to personal travel allowances (PTA), business travel allowances (BTA), tuition fees and medical bills.