ABCON rejects proposal to increase minimum capital requirement for forex traders
The Association of Bureau De Change Operators of Nigeria (ABCON) has maintained that BDCs do not need more than the approved N35million capital base to operate efficiently and profitably.
This is coming against the backdrop of earlier reports that the association had asked the Central Bank of Nigeria (CBN) to increase the minimum capital requirement of forex traders to do business from the present N35million to N350million.
This was made known in a statement issued by the President of ABCON, Aminu Gwadede, where he buttressed that fact.
Gwadebe said that BDC business is not capital intensive as they do not take deposits or lend money to customers. He noted that the operators are licensed to buy and sell forex at the retail end of the market to buyers who already have their own funds ready for the transaction.
Gwadebe said that what the BDCs need is consolidation through mergers of operators and not necessarily recapitalisation of the industry, noting that doing that might edge out professionals and highly experienced operators.
He said, ‘’BDC business is not capital intensive as they do not take deposits or lend funds to customers. The operators are licensed to buy and sell forex at the retail end of the market to buyers, who already have their funds ready for the transaction.
‘’What BDCs need is consolidation through mergers of operators and not recapitalisation of the industry. Recapitalisation may edge out professionals and highly experienced operators whose valued industry knowledge will help stabilise the market.’’
In terms of digitisation and the vision of the new CBN management on evidence-based decision-making, Gwadabe said CBN-licensed BDCs have digitised their operations to ensure that rendition of reports is done digitally on ABCON’s automation portal.
The BDCs now record their transactions on Amazon Web Service (AWS) online real time and extract daily reports for return rendition.
Gwadebe, who had pointed out that the continuous depreciation of the naira does not benefit the BDCs and the domestic economy, said that the illiquidity in the market remains a major concern to the BDC sector.
He had among other measures to stabilise the naira, urged the CBN to allow BDCs access dollars or diaspora remittances through the autonomous forex windows like allowing operators to receive IMTOs proceeds, carrying out online dollar operations and Point of Sale (PoS) agency.
