The Central Bank of Nigeria (CBN), yesterday, issued a fresh circular with respect to the temporary access it granted eligible Bureau De Change (BDC) operators to purchase foreign exchange (FX) from Authorised Dealer Banks, (ADBs) via the Nigerian Foreign Exchange Market (NFEM), subject to a weekly cap of $25,000.
According to the new circular, which was signed by Dr. Williams Kanya, the Acting Director of the Trade & Exchange Department at the CBN, a BDC can only purchase the $25,000 from only one Authorised Dealer Bank of its choice in a week.
Other highlights of the new circular include that, Authorised Dealers Banks must sell the FX to BDCs at the prevailing day rate at the NFEM window and that the BDCs must sell the forex cash purchased from the ADBs and other sources, to forex end-users at a rate, “not exceeding one percent margin above the buying rate.”
In addition, the CBN stated that all ADBs must continue to render weekly returns to it on sales of forex to BDCs. The apex bank also said that BDCs are required to render daily returns on forex purchases from ADBs and other sources, as well as sales (utilisation), on the Financial Institutions Forex Reporting System (FIFX).
Furthermore, the CBN stated that BDCs can only disburse purchased FX for eligible transactions such as Business Travel Allowance (BTA) / Personal Travel Allowance (PTA), Overseas school fees and Overseas medical fees subject to a maximum of $5,000 per transaction, quarterly.
The regulator emphasised that BDCs must maintain proper records of all transactions, which must show the Bank Verification Number (BVN) of the enduser and an endorsement of the amount disbursed in the International Passport of the beneficiary.
While reiterating that all operators must comply strictly with Anti-Money Laundering (AML) laws and Know Your Customer (KYC) requirements to prevent fraud and illicit financial activities, the CBN warned that any Authorised Dealer Bank or BDC that violates the regulations will, “attract appropriate sanction, including suspension of its dealership license.”
In a circular it issued on December 20, the CBN announced that it had granted BDCs temporary permission to purchase up to $25,000 weekly in foreign exchange from ADBs via the NFEM.
It said that the move was designed to meet seasonal retail demand for forex during the festive season, adding that the arrangement will be in effect from December 19, 2024, to January 30, 2025.
