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The Central Bank of Nigeria has released new directives that limit bureau de change operators to acquiring foreign exchange from a single authorized dealer once a week.
The bank has also instructed the BDCs to adhere to Know Your Customer (KYC) regulations.
In a circular sighted by Rocktetparrot News and signed by W.J. Kanya, the acting director of the Trade and Exchange Department, the central bank set a weekly purchasing limit of $25,000 per BDC from authorized dealers.
“A BDC should approach its chosen Authorised Dealer Bank (ADB) and can only obtain the specified amount from that particular bank within a week. Any violation of this rule will result in appropriate penalties. The selling rate by the Authorised Dealers to BDCs will be the prevailing rate of the day at the NFEM window," it stated.
The CBN allowed FX cash bought by BDCs from authorized dealer banks to be sold to end users at a rate not exceeding a one percent margin above the buying rate.
According to the bank, this one percent margin will apply to all funds that BDCs retail, irrespective of their sources.
Furthermore, it required authorized dealer banks to submit weekly reports on sales to BDCs in a specified format that accompanies the guidelines to the central bank. It also urged all BDCs to file daily updates on FX purchases from authorized dealer banks and other sources, as well as sales through the Financial Institutions Forex Reporting System (FIFX).
Additionally, it mandated that funds acquired by BDCs be allocated for specific purposes such as business travel allowances, personal travel allowances, overseas school fees, and overseas medical expenses. It emphasized that for each transaction, the maximum disbursement must not exceed $5,000 per quarter.
"Records must be kept for all transactions conducted by the BDCs, showing the BVN of the end user and including the endorsement of the amount disbursed in the beneficiary's International Passport.
"It should be noted that Authorised Dealer Banks and BDC operators must strictly observe Anti-Money Laundering Laws and adhere to appropriate KYC standards when handling these transactions," it stated.
The CBN warned that authorized dealers and BDCs that misappropriate funds or breach the guidelines will face penalties, including the suspension of their dealership license.
