CBN Revokes Licence Of 2,698 BDCs

Central Bank of Nigeria (CBN) has slashed list of Bureau de Change dealers to 2,991 in effort to curb illicit financial activities and boost exchange rate stability

The new action by the central bank brings the total to 2,991. The apex bank published a list of approved BDCs, revoking the licences of 2,698 operators.

The BDCs have been instrumental in determining the exchange rate in Nigeria, with their numbers soaring from 74 in 2005 to 5,689 in 2021.

However, suspended CBN governor Godwin Emefiele expressed concerns over round tripping and illicit financial activities, leading to the prohibition of foreign exchange sales to BDCs.

In response to the currency depreciation since the floating of the naira in June, recommendations have been made during Tinubu’s administration to implement key reforms.

The reforms include raising the capitalization requirements for BDC operators and allowing Nigerian banks to act as primary dealers in the forex market.

As of the latest update, the exchange rate at the Investors’ and Exporters’ FX Window reached N795.28 per dollar, while the naira closed at N820 per dollar at the parallel market, N1,095 per British pound, and N905 per Euro.

The Central Bank of Nigeria has reduced the number of Bureau de Change dealers to 2,991.

The CBN yesterday published a list of approved in a document entitled: ‘Approved BDCs’. The document revealed that the licences of 2,698 BDCs have been revoked.

A similar list was published by the apex bank last year, which approved 5,689 black market dealers. BDCs play a significant role in determining the exchange rate in Nigeria.

The number of operators has experienced substantial growth, increasing from 74 in 2005 to 5,689 in 2021.

Former CBN governor Godwin Emefiele, later prohibited the sale of foreign exchange to BDCs due to concerns of round tripping and involvement in illicit financial activities.

Under Tinubu’s administration, recommendations were made to implement key reforms such as increasing the capitalisation requirements for BDC operators and allowing Nigerian banks to act as primary dealers in the forex market.

Since the floating of the naira by the CBN in June, the currency has depreciated, with the exchange rate reaching N795.28 at the Investors’ and Exporters’ FX Window.

At the parallel market, the naira closed at N820 per dollar, N1,095 per British pound, and N905 per Euro.