The Central Bank of Nigeria (CBN) has reiterated that its modifications to the guidelines on the regulation of Bureau de Change (BDCs) in Nigeria are aimed at sanitising the industry and also at conserving the country’s foreign reserves, among other objectives.
This position was made known by the CBN Governor, Mr. Godwin Emefiele during an interactive session with the House of Representatives Committee on Banking and Currency.
Addressing members of the Committee, Emefiele explained that modifications had to be made to the guidelines following observations that the current operations of BDCs in Nigeria had deviated from the objectives for which they were licenced.
According to the CBN governor, the central bank observed that many operators were only interested in widening margins and profits from the foreign exchange market, regardless of prevailing official and interbank rates.
He further disclosed that a recent cross-country survey of BDCS carried out by the CBN revealed that 93 per cent of the BDCs were in breach of the objectives and provisions of the guidelines, noting that many of the BDCs could either not be located or relocated without approval.
He also said majority of the BDCs had no good accounting records, many had no adequate sales document and lacked audit trail.
While urging the lawmakers to support the policy, Emefiele said the central bank’s is to have in place BDCs that are well-capitalised, properly structured and can effectively perform the roles of BDCs in the Nigerian economy.
The CBN governor, while debunking claims in certain quarters that the modifications to the guidelines were targeted at a certain section of the country and would lead to loss of jobs, cited the successes recorded during the banking sector consolidation exercise of 2005 as indicators that the current move will succeed.
Speaking earlier, the Chairman, House Committee on Banking and Currency, Hon. Jones Chukwudi Onyeriri, noted that the Committee respected the autonomy of the CBN but would work with the apex bank to ensure that it delivers on its mandate in the overall interest of Nigerians.
In order to ensure that BDC operators comply with the new capital requirements, the CBN recently extended the deadline to July 31, 2014. The forex dealers were previously given a deadline of July 15 2014.
The central bank also stated that interest would now be paid on the mandatory cautionary deposit of N35 million, based on banking industry savings account rate
House of Reps should the CBN to do its work and sanitize the BDC sub-sect of our financial system!