Business

CBN introduces stricter measures for BDCs, imposes N2bn licence fee

Published

10 months ago

February 24, 2024

CBN introduces stricter measures for BDCs, imposes N2bn licence fee

Amidst the ongoing forex crisis in Nigeria, the Central Bank of Nigeria (CBN) has implemented stringent measures targeting Bureau De Change (BDC) operators to address the deteriorating economic situation.

The country faces severe economic challenges, with the naira plunging to an all-time low of N2,000 against the dollar. In response, the National Security Adviser, Mallam Nuhu Ribadu, has directed law enforcement agencies, including the Economic and Financial Crimes Commission (EFCC) and the Department of State Services (DSS), to clamp down on currency speculators operating in the forex market. This directive has led to nationwide raids on BDCs and the arrest of illegal operators.

On Friday, the CBN’s Financial Policy and Regulation Department issued a new set of guidelines for BDC operators and stakeholders in the financial sector. Among the key provisions are:

License Requirements: BDCs in Tier 1 must have a capital base of N2 billion, while Tier 2 BDCs must maintain a capital base of N500 million.
Ownership Restrictions: Entities such as banks, government agencies, and NGOs are prohibited from holding ownership stakes in BDCs.
Permissible Activities: BDCs are authorized to buy and sell foreign currencies, issue prepaid cards, and serve as cash points for money transfer operators. However, they are prohibited from accepting deposits, granting loans, dealing in gold, or engaging in capital market activities.

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Foreign Currency Sourcing: BDCs can source forex from authorized dealers, travellers, hotels, embassies, etc. Transactions exceeding $10,000 require a declaration of the source.
Sale of Foreign Currencies: BDCs can sell forex for travel, medical bills, school fees, etc., within specified limits per customer annually. At least 75% of sales must be via transfer, with the remaining 25% allowed in cash.
Operational Standards: BDCs must adhere to customer verification procedures, maintain transaction records, connect to CBN systems, and display exchange rates clearly, among other requirements.
Supervision and Compliance: BDCs are mandated to submit specified regulatory returns, maintain accessible records for inspection, and ensure compliance with the established guidelines.
Franchising and Prudential Requirements: Tier 1 BDCs appointing franchises must adhere to specified standards regarding policy, monitoring, and branding, while all BDCs must comply with prudential requirements on open positions, fixed assets, borrowings, dividend payments, etc.
AML/CFT Compliance: BDCs must comply with Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) regulations, including implementing policies, monitoring activities, and reporting suspicious transactions.

These measures represent a concerted effort by the CBN to regulate and stabilize the forex market while ensuring transparency and accountability among BDC operators.

CBN introduces stricter measures for BDCs, imposes N2bn licence fee

Railway

Lagos Rail Mass Transit part of FG free train ride – NRC

Published

14 hours ago

December 21, 2024

Trends Admin

Lagos Rail Mass Transit part of FG free train ride – NRC

The Nigerian Railway Corporation (NRC) has disclosed that the Lagos Rail Mass Transit (LRMT) trains are included in the Federal Government’s free train ride initiative for the Christmas and New Year celebrations.

The LRMT, which currently includes the Phase 1 Blue Line Rail and the Phase 1 of the Red Line Rail, operates under the Lagos Metropolitan Area Transport Authority (LAMATA).

This announcement was made by Ben Iloanusi, the Acting Managing Director of the NRC, during an interview on NTA News TV on Friday, following the launch of the initiative earlier that day.

While Iloanusi stated that Phase 1 of both the Blue Line and Red Line Rail projects are part of the program, LAMATA has yet to confirm this inclusion.

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Iloanusi outlined the other routes benefiting from the scheme, which include the Lagos-Ibadan Train Service, Kaduna-Abuja Train Service, Warri-Itakpe Train Service, Port Harcourt-Aba Train Service, and the Bola Ahmed Tinubu Mass Transit in Lagos. Notably, little was previously known about the Bola Ahmed Tinubu Mass Transit service until this disclosure.

“Let me mention the routes where this free train service is happening. We have the Lagos-Ibadan Train Service, we have the Kaduna-Abuja Train Service, we have the Warri-Itakpe Train Service, we have the Lagos Rail Mass Transit trains, we have the Port Harcourt-Aba Train Service, and we have what we call the Bola Ahmed Tinubu Mass Transit, which is also in Lagos,” he stated.

Iloanusi provided operational updates, stating that passengers nationwide can access free tickets online or, for those unable to do so, at train stations where they will be profiled and validated.

He noted that passengers using NRC-managed services (excluding the Lagos Rail Mass Transit) should reserve tickets via the official website, www.nrc.gov.ng, with a valid ID required. He also advised travelers to plan, arrive on time, and bring valid identification.

Lagos Rail Mass Transit part of FG free train ride – NRC

Business

NNPC denies claim of Port Harcourt refinery shutdown

Published

14 hours ago

December 21, 2024

Trends Admin

Port Harcourt refinery

NNPC denies claim of Port Harcourt refinery shutdown

The Nigerian National Petroleum Company Limited (NNPCL) has denied claims in media reports that the newly refurbished Port Harcourt refinery has shut down.

The national oil company denied the claim in a press release issued by its Chief Corporate Communications Officer, Olufemi Soneye, on Saturday.

Soneye said the claim was false and urged Nigerians to disregard it. He stressed that the Port-Harcourt Refinery is fully operational.

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The statement read, “The attention of the Nigerian National Petroleum Company Limited (NNPC Ltd.) has been drawn to reports in a section of the media alleging that the Old Port Harcourt Refinery which was re-streamed two months ago has been shut down.

“We wish to clarify that such reports are totally false as the refinery is fully operational as verified a few days ago by former Group Managing Directors of NNPC.”

He noted that preparation for the day’s loading operation is currently ongoing, and added that claims of the shutdown are “figments of the imagination of those who want to create artificial scarcity and rip-off Nigerians.”

NNPC denies claim of Port Harcourt refinery shutdown

Business

CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

Published

2 days ago

December 20, 2024

Trends Admin

CBN Governor, Olayemi Cardoso

CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

The Central Bank of Nigeria (CBN) has granted Bureau de Change (BDC) operators temporary permission to purchase up to $25,000 weekly in foreign exchange (FX) from the Nigerian Foreign Exchange Market (NFEM).

This move, detailed in a circular dated December 19, 2024, is designed to meet seasonal retail demand for FX during the holiday period.

The circular was signed by T.G. Allu, on behalf of the Acting Director of the Trade and Exchange Department.

The arrangement will be in effect from December 19, 2024, to January 30, 2025.

Under the directive, BDCs may purchase FX from a single Authorized Dealer of their choice, provided they fully fund their accounts before accessing the market.

Transactions to occur at the prevailing NFEM rate

The transactions will occur at the prevailing NFEM rate, and BDCs are required to adhere to a maximum 1% spread when pricing FX for retail end-users.

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All transactions conducted under this scheme must be reported to the CBN’s Trade and Exchange Department.

The circular read in part:

“In order to meet expected seasonal demand for foreign exchange, the CBN is allowing a temporary access for all existing BDCs to the NFEM for the purchase of FX from Authorised Dealers, subject to a weekly cap of USD 25,000.00 (Twenty-five thousand dollars only).

This window will be open between December 19, 2024 to January 30, 2025.

“BDC operators can purchase FX under this arrangement from only one Authorized Dealer of their choice and will be required to fully fund their account before accessing the market at the prevailing NFEM rate. All transactions with BDCs should be reported to the Trade and Exchange department, and a maximum spread of 1% is allowed on the pricing offered by BDCs to retail end-users.”

The CBN assured the general public that PTA (Personal Travel Allowance) and BTA (Business Travel Allowance) remain available through banks for legitimate travel and business needs.”

These transactions are to be conducted at “market-determined exchange rates” within the NFEM framework.

This initiative reflects the CBN’s strategy to stabilize the FX market and manage seasonal surges in demand.