The Central Bank of Nigeria (CBN) has issued a stern warning that it will suspend the licenses of any Bureau de Change (BDC) operators or Authorised Dealer Banks found violating its newly introduced foreign exchange (FX) trade regulations.
In a statement released on Tuesday, the Acting Director of the Trade and Exchange Department, Dr. W.J. Kanya, emphasized that the fresh directives follow the CBN’s temporary approval allowing existing BDCs to purchase foreign exchange from authorized dealers, with a **strict weekly limit of $25,000**.
Additionally, the apex bank has capped individual transactions at a maximum of $5,000 per quarter for BDCs.
Key Foreign Exchange Guidelines
The CBN has outlined several measures to regulate FX transactions involving BDCs and authorized dealers:
– Weekly Purchase Limit: Each BDC can only buy a maximum of $25,000 per week from authorized dealers.
– Single Dealer Restriction: A BDC is restricted to purchasing foreign exchange from only one preferred Authorised Dealer Bank per week. Violating this rule will attract penalties.
– Exchange Rate Compliance: Authorized dealers must sell FX to BDCs at rates aligned with the Nigerian Foreign Exchange Market (NFEM) window.
– 1% Margin Limit: BDCs are required to sell forex to customers at a **maximum margin of 1%** above their buying rate, regardless of the source of funds.
– Reporting Obligations:
– Authorised Dealer Banks must submit **weekly reports** on forex sales to BDCs via the CBN’s designated email (teddmo@cbn.gov.ng).
– BDCs must also **submit daily transaction reports** on forex purchases and utilization records through the **Financial Institutions Forex Reporting System (FIFX)**.
Permitted Uses & Compliance Measures
The CBN has specified that foreign exchange obtained by BDCs may only be used for:
– Business Travel Allowance (BTA) / Personal Travel Allowance (PTA)
– Overseas tuition fees
– Medical expenses abroad
Each beneficiary is subject to a **quarterly limit of $5,000** for these transactions.
Additionally, BDC operators must maintain proper records of all transactions, including:
– Bank Verification Number (BVN) of end-users
– Endorsement of disbursed amounts in the beneficiary’s international passport
The CBN also reinforced the necessity of strict adherence to **Anti-Money Laundering (AML) laws** and **Know Your Customer (KYC) regulations** in FX dealings.
Penalties for Non-Compliance
The CBN has warned that any **BDC operator or Authorised Dealer Bank** found engaging in fund diversion or violating these guidelines will face **serious sanctions**, including **the suspension of their operating licenses**.
