The Central Bank of Nigeria (CBN) has announced a six-month extension for Bureau De Change (BDC) operators to meet the new capital requirements, moving the deadline from December 3, 2024, to June 3, 2025. This decision comes as the CBN noted a low level of compliance with the recapitalization mandates, a move aimed at strengthening the foreign exchange sector.
Aminu Gwadabe, the President of the Association of Bureaux De Change of Nigeria (ABCON), shared the news during an emergency virtual general meeting attended by over 220 licensed BDCs, alongside ABCON council members and stakeholders. The extension was welcomed by industry players, with Gwadabe expressing gratitude to the CBN for the opportunity to ensure smoother compliance. He emphasized the CBN’s commitment to collaborating with BDCs to facilitate the recapitalization process, which he believes will present “immeasurable” opportunities for operators.
The recapitalization requirements stipulate that Tier-1 BDCs must raise a minimum of N2 billion to continue operations, while Tier-2 BDCs are required to raise N500 million. Tier-1 operators will be allowed to operate nationwide, while Tier-2 BDCs will be limited to one state. These new regulations are part of broader reforms aimed at enhancing the role of BDCs in Nigeria’s foreign exchange market.
The updated guidelines also introduce new licensing rules and categorization, with Tier-1 BDCs permitted to establish branches and appoint franchisees across the country, while Tier-2 BDCs can operate only within one state. A key stipulation is that BDCs must maintain a distance of at least one kilometer between branches and franchisees.
These changes are expected to bolster the financial stability and regulatory compliance of the BDC sector. However, the CBN has also prohibited certain financial entities, including commercial banks and money transfer operators, from holding BDC licenses, as part of efforts to ensure the integrity of the sector.
The extended deadline gives BDC operators additional time to meet these capital requirements, with the CBN signaling ongoing support to help them navigate the new regulatory landscape.