Forex: Revocation of 4,173 BDCs’ licences to restore consumer confidence in economy –CBN

*The Central Bank of Nigeria affirms the latest measure is part of efforts at restoring confidence in the country’s Foreign Exchange market ecosystem, noting it is revising the regulatory and supervisory guidelines for Bureau de Change operations

Isola Moses | ConsumerConnect

Sequel to alleged regulatory infractions, the Central Bank of Nigeria (CBN) announces the Bank has revoked the licences of 4,173 Bureaux De Change operators in the country.

ConsumerConnect reports the banking sector regulator took the decision because the affected Forex market institutions had failed to observe regulatory provisions.

The Bankers’ Bank noted that its action was an exercise of the powers conferred on it under the Bank and Other Financial Institutions Act (BOFIA) 2020, Act No. 5, and the Revised Operational Guidelines for Bureaux De Change 2015 (the Guidelines).

Mrs. Sidi Ali Hakama, Acting Director of Corporate Communications at CBN, who confirmed the development in a statement issued Friday, March 1, 2024, said the measure was part of efforts to restore confidence in the nation’s foreign exchange market.

Noting that the list of affected BDC operators is available on its Web site, the CBN also disclosed it is revising the regulatory and supervisory guidelines for Bureau de Change operations in Nigeria.

According to the banking regulator, compliance with the new requirements will be mandatory for all stakeholders in the sector.

The Acting Spokesperson further stated that the action is an exercise of the powers conferred on it under the Bank and Other Financial Institutions Act (BOFIA) 2020, Act No. 5, and the Revised Operational Guidelines for Bureaux De Change 2015 (the Guidelines).

The CBN disclosed these include payment of all necessary fees, such as licence renewal, within the stipulated period in line with Guidelines, rendition of returns in line with the Guidelines, and compliance with guidelines, directives and circulars of the CBN, particularly Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT) and Counter-Proliferation Financing (CPF) regulations.

Nigeria has been struggling with high inflation, food inflation, Forex crisis, economic hardship and high cost of living occasioned by the removal of petrol subsidy, attracting protests in parts of the country, according to report.

Subsequently, the Naira,  Nigeria’s national currency has experienced a dip in the last nine months since the President Bola Ahmed Tinubu administration effected the unification  of the Foreign Exchange window.

The Naira has seen an all-time low, falling from about N700/$1 May 2023 to over N1,500/$1 at the moment, according to report.

As part of the measures at  restoring the value of the Naira, regulators have turned attention to cryptocurrency Web sites, clamping down on them through telecommunication companies.

Dr. Olayemi Cardoso,  Governor of the Central Bank of Nigeria (CBN), Tuesday this week, said illicit flows in the form crypto exchanges passed through Binance to the tune of $26 billion.

Cardoso told reporters during the first Monetary Policy Committee (MPC) meeting of the CBN this year: “We are concerned that certain practices go on that indicate illicit flows going through a number of these entities (crypto platforms) and suspicious flows at best.”

He also noted: “In the case of Binance, in the last one year alone, $26bn has passed through Binance Nigeria from sources and users who we cannot adequately identify.”

Government alleges sabotage

In reaction to the development on the Forex market, Mr. Bayo Onanuga, Special Adviser to the President on Information and Strategy, while featuring on a Channels TV programme Wednesday, said if not stopped, cryptocurrency trading Web site Binance would destroy the Nigerian economy by arbitrarily fixing Foreign Exchange rate.

Onanuga opined: “If we don’t clamp down on Binance, Binance will destroy the economy of this country. They just fix the rate.

“We have saboteurs. Look at what Binance is doing to our economy. That is why the government moved against Binance. Some people sit down using the cyberspace to dictate even our exchange rate, hijacking the role of the CBN.”