CBN plans to bar BDCs from street trading, limits cash forex purchase to $500

CBN plans to bar BDCs from street trading, limits cash forex purchase to $500

The Central Bank of Nigeria (CBN) is considering banning Bureau De Change (BDC) operators from street trading and limiting the cash payment for selling FX to a maximum of $500.

The apex bank disclosed this in its proposed revised regulatory guidelines for BDC operators in Nigeria published by the bank.

However, the proposed ban on street trading by BDCs is not new as the bank in its revised operational guidelines for BDCs in 2015 prevented street trading by BDCs.

According to the bank, permissible activities by BDCs include; the acquisition of forex from approved sources, sales of FX in line with its guidelines, serving as cashout points for IMTOs etc.

On the other hand, the apex bank prevented BDC from engaging in street trading, account maintenance, accepting deposits and granting of loans, facilitating international outward transfers, dealing in precious stones and metals, establishing subsidiaries and others.

Forex sellers above $10,000 to declare their source

Furthermore, the bank noted that sellers of forex above $10,000 are mandated to disclose the source of the forex and proposed to ban cash payment to customers for forex above $500. It also proposed to ensure digital transfer purchases of foreign currencies by customers are made to the BDCs naira account.

It stated, “Sellers of the equivalent of USD10,000 and above to a BDC are required to declare the source of the foreign exchange and comply with all AML/CFT/CPF regulations and foreign exchange laws and regulations.
“Payments to customers for cash purchases of foreign currency, the equivalent of above USD500, shall be by transfer to the customer’s Naira bank account. If the customer is a non-resident (whether Nigerian or not), a BDC shall issue the customer a prepaid NGN card. Where such a card is issued, relevant maximum credit and cumulative limits, in line with relevant Know Your Customer requirements, shall apply.”

What you should know

The CBN in recent times have blamed the whopping depreciation of the naira to speculation with the Governor stating the naira is “undervalued” and with time returns to its true value.

The apex bank in the past few months has introduced a slew of initiatives aimed at boosting liquidity in the forex market and shoring up the value of the naira.

The proposed regulation aims to sanitise the operations of BDCs across the country, limit the proliferation of BDC operators and enable the CBN to weigh in on their activities. The regulations although a proposal and subject to review over time.
In the past weeks, security agencies such as the EFCC and DSS have begun a crackdown on street traders of foreign currencies in a bid to formalise the industry. Also, there have been reports of restrictions of Nigerian traders from accessing the Binance forex trading platform in what many adjudge to be a crackdown on the platform for Nigerians.
One of the spokespersons to President Tinubu, Bayo Onanuga confirmed the report of the blockade of access of Nigerians to forex and crypto trading platforms Binance and Coinbase.