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Friday, September 29, 2023

CBN Revokes 2,991 BDC Licences

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The Central Bank of Nigeria (CBN) has reduced the number of approved Bureau de Change (BDC) dealers to 2,991 from over 5,689.

The apex bank disclosed this on Wednesday in its published list of approved BDCs.

The apex bank published a similar list in 2022, which approved 5,689 black market dealers.

This is coming on the heels of the exponential growth of BDCs operators.

The CBN under Governor Godwin Emefiele inexplicably continued to license thousands of new BDCs, despite admitting it was unable to effectively police those already licensed.

The CBN had in June 2014, increased the minimum capital requirement for Bureau De Change operations in Nigeria to N35m in order to weed out what it said were “unserious elements in that sub-sector” and correct some grave inefficiencies and sharp practices.

It then directed all existing Bureau De Change to comply with the new requirements by July 15, 2014. Before the hike in minimum capital requirement from N10 million to N35 million, a total of 3, 208 BDCs were officially registered with the CBN.

In August 2014, the CBN announced that a total of 2, 442 BDCs met the new capital requirement, and by November 2014 a total of 2,512 BDCs had reportedly scaled the re-capitalisation hurdle of the CBN.

However, instead of putting measures in place to effectively monitor the new set of BDCs that had met its rules, the CBN went on another BDC licensing spree.

From the 2,512 BDCs licensed as at November 2014, the number jumped to 5,689 BDCs registered in Nigeria as at June 30, 2021, according to CBN data. That is equivalent to a 126 percent increase or 3,177 new BDCs licensed in just 7 years.

On June 14, the CBN, under the directive of President Bola Ahmed Tinubu, introduced operational reforms to the country’s foreign exchange market, which led to the unification of the forex window.

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