The Association of Bureaux de Change Operators of Nigeria (ABCON) has kicked against amendments to the new requirements for BDC operations, saying it is an indirect attempt to empower few operators in the sub-sector and consequently force many of the BDC operators into liquidation.
Last week, the Central Bank of Nigeria (CBN) amended the new requirements for BDC operations. The deadline for compliance was extended to July 31, while the mandatory caution deposit of N35 million would now attract interest at savings account rate.
Aminu Gwadabe, president of the association, said ABCON appreciates the amendments and also supports meaningful and achievable reforms in the sub-sector but contended that the amendments are far from the recommendations made by the association during a meeting the CBN governor had with its executive council on July 1.
“We recommended that deadline for compliance should not be less than one year as it is the tradition of the CBN in the recapitalisation exercise for other regulated entities. This is because no organisation can meet the statutory requirements for recapitalisation, either by raising fresh capital or through mergers/acquisitions within the period stipulated as deadline by the CBN for BDCs to meet the new minimum capital requirements. By asking BDCs to recapitalise within one month, the CBN is probably asking them to disregard these statutory requirements, and hence commit illegality.
“We also recommended that the mandatory caution deposit should be eliminated as there is no justification for such deposit. BDCs are not deposit taking organisations; we operate on cash and carry basis. We pay for CBN dollars two days in advance. So there is no need for such deposits,” Gwadabe said.
He said that ABCON also rejects the decision of the apex bank to limit the weekly dollar sale to BDCs that meet the new requirements by July 31, saying it will bring back the activities of black market operators and incidence of fake currency in circulation, which the BDCs were able to abolish as a result of their involvement in monetary tool of the CBN in 2006 during the tenure of the former CBN governor.
