To Tackle Forex Crisis, CBN moves To Increase BDCs Operating License From N35m To N2bn

In a bid to tackle the foreign exchange crisis facing the Nigerian economy, the Central Babk of Nigeria on Friday unveilled plans to increase the share capital of Bureau De Change operators to N2bn and N500m for Tier 1 and Tier 2 licenses.

Before the new plan, the operating license for BDCs was previously N35m

This was contained in the draft revised regulatory and supervisory guidelines for BDCs in Nigeria.

The new guidelines contain several new changes to the guidelines for BDC operations in the country.

Details showed that under the minimum capital requirements, the central bank is introducing a two-tier license for BDC operators in the country.

It said a Tier 1 BDC is authorized to operate on a national basis and can open branches and may appoint franchisees, subject to the approval of the CBN.

“A Tier 1 BDC (which is the franchisor) shall exercise supervisory oversight over its franchisees. All franchisees shall adopt their franchisor’s name, branding, technology platform, and rendition requirements,” it added.

The CBN said further that a Tier 2 BDC is authorized to operate only in one state or the FCT. It may have up to three locations – a head office and two branches, subject to approval of the CBN. It is not permitted to appoint franchisees.

Under Tier 1 operators are expected to have N2bn as minimum share capital while also depositing a Mandatory Caution Deposit of N200 million.
The application and license fee is also N1 million and N5 million respectively.

Under Tier 2 operators are expected to have N500 million as minimum share capital while depositing a Mandatory Caution Deposit of N50m.
The application and license fee are also N250,000 and N2m respectively.

The apex bank also stated that the prescribed minimum capital of BDCs and any subsequent capital injection shall be subject to verification by the CBN.

Also, BDC licences are renewable annually subject to compliance with laws and regulations applicable to BDCs and the payment of the non-refundable annual licence renewal fee, which is N5m for Tier 1 operators and N1 million for Tier 2.