The Central Bank of Nigeria (CBN) has ordered foreign exchange sellers to Bureau De Change (BDC) of 10,000 dollars or more to disclose their forex sources.
Haruna Mustapha, Director, Financial Policy and Regulation Department of the CBN, said this in an updated regulatory framework to curb abuses of BDCs and reduce instability in the foreign exchange market.
Mustapha said that such sellers would also have to follow all Anti-Money Laundering/Combating the Financing of Terrorism ( AML/CFT) regulations.
He said that the guidelines would greatly improve the regulatory framework for the operations of BDCs as part of ongoing changes of the Nigerian foreign exchange market.
According to him, the guidelines changes the allowed activities, licensing requirements, corporate governance and AML/CFT provisions for BDCs.
“It also lays out new record-keeping and reporting requirements, among others,” he said.
The guidelines also states that no person shall do the business of BDC in Nigeria except with the previous approval of the CBN.
It defined BDC as a company licensed by the CBN to do only retail foreign exchange business in Nigeria.
It banned commercial, merchant, non-interest and payment service banks, Other Financial Institutions (OFIs), including holding companies and payment service providers from supporting BDCs.
It also stopped serving staff of financial services regulatory and supervisory agencies, serving staff of regulated financial services providers, governments at all levels, among others, from supporting BDCs.
The guidelines allowed BDCs to get foreign currency from authorised sources like tourists, people coming back from the diaspora and foreigners with foreign exchange inflows from work, travel, investment or their domiciliary accounts.
Other allowed sources are International Money Transfer Operators (IMTOs), embassies, hotels that are authorised buyers of foreign currencies, the Nigerian Foreign Exchange Market (NFEM) and any other source that the CBN may name.
It warned the BDCs not to do street-trading, keeping any type of account for any member of the public, or taking any asset for safe keeping/custody.
It said that the BDCs were also not allowed to take deposits from or give loans to members of the public in any currency and in any form.
“Retail sale of foreign currencies to non-individuals, except for BTA, international outward transfers, engaging in off-shore business or maintaining foreign correspondent relationship with any foreign establishment are also not permissible,” it said.
