CBN introduces stricter measures for BDCs, imposes N2bn licence fee – Newstrends
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CBN introduces stricter measures for BDCs, imposes N2bn licence fee

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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

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Breaking: Dangote brings diesel price down to N1000/litre

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Breaking: Dangote brings diesel price down to N1000/litre

Dangote Petroleum Refinery has announced a further reduction in the price of diesel.

When it commenced operation a few weeks ago, Dangote Petroleum Refinery pegged the price of diesel as N1,200.

While rolling out the products, the refinery supplied at a substantially reduced price of N1,200 per litre three weeks ago, representing over 30 percent reduction from the previous market price of about N1,600 per litre.

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However, on Tuesday, a further reduction of N200 was noticed in the price, with the product now pegged at N1,000.

This significant reduction in the price of diesel, at Dangote Petroleum Refinery, is expected to positively affect all the spheres of the economy and ultimately reduce the high inflation rate in the country.

The President of Dangote Group, Aliko Dangote, had during the Eid-el-Fitr celebration said if the cost price of diesel comes down, the inflation rate will be substantially reduced.

Dangote spoke when he visited President Bola Tinubu in his residence in Lagos State to celebrate the end of the Ramadan fast with him.

Breaking: Dangote brings diesel price down to N1000/litre

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Naira records five-month highest gain, sells below N1000/$ at parallel market

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Naira records five-month highest gain, sells below N1000/$ at parallel market

The naira continued its positive showing against the United States dollar on Monday, selling below N1000/$ in some segments of the parallel market.

Newstrends reports that the Federal Government, groups and some individuals have mounted a spirited campaign for those hoarding the dollars to push them out as naira continues to appreciate.

On Monday, the naira was offered in some parts of Lagos and Abuja between N995 and N1,050 per dollar in the parallel market. It was N1,230/$ on Friday.
The latest gain, being over five-month highs, came in the wake of the Iranian attack on Israel and a rise in the crude oil price.
Goldman Sachs, American investment bank economists, had earlier predicted that the naira’s bullish momentum on the foreign exchange market would likely cause it to trade for less than N1,000 per US dollar in the coming months.
According to a report by Nairametrics, the group claimed that the rally in Nigerian currency helped recover from large losses after two devaluations since last June by being bolstered by capital inflows and successive interest rate hikes.
In March, Goldman Sachs projected that the Naira would appreciate to N1,200 per dollar in 2024.

At the official foreign exchange market, the rate was put at N1,136/$ in contrast with N1,205/$ last Friday.

The top bank has implemented several policy initiatives in recent months to bring stability to the foreign exchange market.
The CBN increased interest rates to 24.75% at the most recent meeting of the Monetary Policy Committee (MPC), which helped it recover losses from the two devaluations that occurred since June of last year.
Further gains for the naira result from the CBN’s ongoing intervention, which involves selling foreign exchange to Bureau De Change operators at a revised rate.
The market anticipates higher inflows of US dollars from the sale of foreign currency bonds in the second quarter as disclosed by Finance Minister Wale Edun.

The Federal Government has just offered high-yield short-term debt products at a premium to entice overseas capital into the economy.

The Middle East’s geopolitical unrest and
Notwithstanding a drop in Nigeria’s production volume, crude oil prices have risen beyond $90.

Nigerian grades of oil are trading at a premium to the ICE Brent benchmark.

The Middle East’s geopolitical unrest and the anticipation of an Iranian government strike on Israel caused oil prices to soar.

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Breaking: Nigeria’s inflation rises to 33.2%, says NBS

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Breaking: Nigeria’s inflation rises to 33.2%, says NBS

The National Bureau of Statistics (NBS) says the nation’s inflation rate rose to 33.2 per cent for the month of March 2024.

This represents a 1.5 per cent increase over 32.7 per cent recorded in February 2024.

The NBS disclosed this in a new report released on Monday.

It explained that the rise was primarily due to higher costs of food, beverages, energy, and housing. Compared to February 2024, the inflation rate in March increased at a slower pace, with food inflation reaching 40.01% year-on-year.

NBS attributed the spike in food prices to the rising costs of items like garri, millet, yam tubers, and others. On a month-on-month basis, food inflation slightly decreased to 3.62% in March 2024.

Urban inflation also increased to 35.18% year-on-year in March 2024, while rural inflation stood at 31.45%.

Core inflation, which excludes volatile agricultural products and energy, was 25.90% year-on-year in March 2024.

Overall, the rising cost of living in Nigeria is evident in the significant increase in inflation rates across different categories.

It is crucial for policymakers to address these challenges to alleviate the financial burden on the population.

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