BDC Operators Seek Deadline Extension

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Some Bureau De Change (BDC) operators on Tuesday in Lagos urged the Central Bank of Nigeria (CBN) to extend the deadline for the new capital requirement released for the industry.

The BDCs operators, who pleaded anonymity due to what some of them termed “sensitivity nature of the new capital requirement,” said.

They said that the deadline would hamper economic growth, lead to the closure of many BDCs and loss of jobs, if the recapitalisation time frame was not reviewed.

They also queried the criteria used by the new Governor of CBN at arriving to the time frame, stressing that commercial banks were given enough time to increase their capital base.

Also speaking, a managing director of a BDC, who also pleaded anonymity, said that it would be difficult to raise N35 million within three weeks.

The operator said that even quoted companies on the Nigerian Stock Exchange (NSE) could not raise fresh capital within the stipulated time frame because of the long process of fund raising.

He said that BDCs were privately owned and could only raise capital through private placement of shares to an individual or group of individuals.

According to him, no proprietor of BDC can get a buyer for a property within 30 days.

Another operator said that the new capital requirement would not solve the problem of the industry.

He said that “BDC does not require huge capital because they don’t give loans to people.

“They only buy currencies in accordance to CBN approval”.

The operator, who blamed CBN for the rot in the industry, said that the government bank failed to adhere to its licencing procedure.

The operator said that the apex bank approved licences to every “dick and harry” unlike when only professionals were given operational licence.

He alleged that many managing directors of BDCs could not read or write, noting that in the past promoters of BDCs must have a minimum of 10 years financial experience.

The operator said that profiteering in the industry would be solved through proper scrutiny and adherence to licencing rules and procedure.

The CBN had on June 22 released fresh guidelines for BDC operators and raised the operating capital base to N35 million from N10 million to check persistent depletion in the country’s external reserves.

CBN in a statement issued by Mr. Isaac Okoroafor, on behalf of the Director, Corporate Communications Department, said that the deadline for the new capital was July 15.

It said the new guidelines would also help the bank to check the financing of unauthorised transactions as well as the `dollarisation’ of the Nigerian economy.

It added that the N35 million must be deposited in a non-interest yielding account in the CBN subject to a grant of approval-in-principle.

In addition to the money, it said that all BDCs applying for the new licence would be expected to make an application fee of N100,000; a licensing fee of N1 million naira and an annual renewal fee of N250,000.

It also stated that unlike in the past, multiple ownership of the BDC would not be permitted, adding that anyone found having more than one BDC would be severely punished.