CBN to crack down on illegal transactions by BDC operators
The Central Bank of Nigeria (CBN) is set to crack down on Bureau De Change (BDC) operators involved in illegal transactions.
The apex bank has completed an investigation into one BDC called Crown Agent and will soon take action against it.
The Acting Governor of the CBN, Folashodun Adebisi Shonubi stated at a press conference in Lagos that they have been investigating several players in the market who have been bringing in money and selling it in unofficial ways.
Crown Agents is one of the BDCs that have been found to be working with international agencies to bypass the normal system and sell to Nigerian companies.
Shonubi warned that Crown Agents and other BDCs involved in illegal transactions can expect to face consequences soon.
He also mentioned that BDCs that are unable to adopt electronic transactions will gradually fade out of the system, as the CBN aims to reduce reliance on cash.
In response, the national President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe expressed support for measures on reforms and standardisation of operational procedures.
He highlighted that ABCON members have already embraced digitisation, with online interfaces for timely reporting to the CBN and integration with the NIBSS platform for client verification.
The CBN’s clampdown on erring BDC operators aims to ensure compliance with regulations and promote transparency in the foreign exchange market.
“In view of the above-mentioned layers of our automation journey I believe our members have long prepared for technology and automation where the future holds,” he said.
According to him the Association as a self-regulatory organisation is collaborating with the regulators and the security agencies on awareness of money laundering and terrorism financing vulnerabilities and threats with a view on how to mitigate the vulnerabilities.
“It is therefore germane for any erring member to be penalized accordingly. Finally, on behalf of our members I want to express our assurances to the CBN and our readiness to be on the same page on their aspirations for the strengthening of our local currency and the elimination of volatility in the market.
“Over the years the BDCs have remained the most potent pass through effect and transmission mechanism of the apex bank foreign exchange policies,” Gwadabe said.
The CBN in July 2023 updated the number of BDCs operating in the country, confirming 5,687 operating licenses.
This was disclosed in a publication titled, ‘Approved BDCs’, seen on the CBN website.
The CBN had before then said it would come up with the full list of licensed BDCs operating in the country, contrary to reports on license revocation.
Gwadabe said the CBN was updating their BDCs register based on compliance criteria in obligations of BDCs return renditions and annual fees payments.
“I therefore advise my members to comply and avoid unnecessary sanctions and exclusion of their licenses,” he said.
The number of BDC operators in Nigeria has risen by more than 75-fold in 18 years, from 74 in 2005 to 5,687 in 2023, data from the CBN revealed.
