Connect with us

Business

BDC Operators Plan Mergers Over N2b Mandatory Deposit

Published

on

Bureau De Change
Getting your Trinity Audio player ready...

 

BDC Operators Plan Mergers over N2b Mandatory deposit

By Mustapha A Mustapha

Bureau De Chamnge operators are tinkering with merger in the face of the latest Central Bank of Nigeria hike in share capital of licenced operators.

The President of the Association of Bureau De Change of Nigeria, Aminu Gwadebe, disclosed this at the weekend, saying that members of the association would consider mergers if the proposed guidelines for their operations go into effect.

The Central Bank of Nigeria, in a draft paper titled ‘Revised Regulatory And Supervisory Guidelines For Bureau De Change Operations In Nigeria’ on Friday, proposed an increase in the share capital of Bureau De Change operators to N2bn and N500m for Tier 1 and Tier 2 licences, respectively.

The currency operators were previously charged N35m for a general licence.

Also, the apex bank would be mandating BDC license holders to make caution deposits of N200m and N50m for Tier 1 and Tier 2, respectively.

Gwadebe said: “Definitely, that is why we are asking for the general license hold, where during that period of consolidation, no new licenses should be issued. They should allow the old licenses to come together and form those mega, consolidated operations in cash sale and ownership structure.”

According to the ABCON president, the proposed cautionary deposit is not global practice neither are BDCs engaging in deposit-taking operations.

He said, “There are some absolute figures that we are going to review and give our recommendation on those figures because they are high and in some places, they are not even existent. If you are talking about cautionary deposits, there is nowhere in the world where a bureau de change is made to pay a cautionary deposit.

“Cautionary deposit is not a global practice. Even if that should happen, they should look at it. We are not deposit-takers like banks, where if a bank collapses, the depositors will have a fallback. We don’t have that risk.

“I understand that there may be some infractions with some BDCs but to put that amount is extremely high and it is not even a global practice.”

Gwadebe further stated that ABCON’s over 5,000 members across the country would be meeting first at the zonal level, and then a committee would be set up to deliberate and come up with the industry’s stance on the CBN’s proposals.

“This is the first time that the central bank will share a draft framework for the BDC subsector for their input. Most times, we are not carried along, and our input is not respected. So, we commend the central bank for sharing the draft. It is not cast in stone, so our members should be calm.

“It’s just like when you had microfinance bank consolidation. It took them a while, a whole of lot inputs were generated, and a lot of things were reviewed. So, reform is a dynamic thing; it is a continuous process. It has been done in the banking industry and it will continue to be done in the banking industry. It is all about reforms and we embrace reforms,” he enunciated.

Gwadebe added that ABCON’s members would be looking at the Tier 1 and Tier 2 BDCs licenses and other aspects of the proposed guidelines.

“I’m happy that it is a draft and not cast in stone. They expect stakeholders’ contribution, critique and review. We are engaging them. They have given us time to call our stakeholders’ meeting to decide on our views, observations, recommendations and complaints and forward them to them as our industry position.

“Based on that, each zone is mandated to call a general meeting of its members and come up with a position. After that, a committee will be created that will look at those recommendations from the zones and come up with what we will forward to the Central Bank of Nigeria,” he added.

Speaking further, Gwadebe revealed that ahead of the proposed guidelines, the apex bank was working on modalities to re-allow BDCs to operate legally in Nigeria.

The CBN had banned the operations of BDCs since July 2001, as part of measures to stabilise the local currency.

Gwadebe said, “The good news is that the CBN has reconsidered the BDCs even before the final consolidation to at least bring them back.

“The modalities are being worked on and business will start on or before Wednesday. These revised guidelines are for the long-term plan but the immediate plan is for the CBN to come back to intervene in our sub-sector through whatever window that we will know the modalities by Monday.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

We are Daily Hint Monthly news magazine published in Abuja, with the aim of reporting relevant key issues about the nation, and Daily Hint has a team of seasoned media professionals with vast experience generated from years of ethical Journalistic practice and public relations service in both public and private media outlets. Our soul aim is to contribute on promoting government policies, programmes and projects , in addition to making efforts to properly articulate issues of public interest. We're situated at zone 5, Michael okpara way, opposite ibro hotel, shippers' plaza. Email: harunayusuf750@gmail.com Tel: 08067044121, 09037937822. Message: 09047623181

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © 2024, Daily Hint News, All Right Reserved