BREAKING: CBN Introduces New FX Sales Regulation for BDCs

The Central Bank of Nigeria (CBN) has announced new regulations limiting Bureau de Change (BDC) operators to purchasing foreign exchange from a single authorised dealer each week.

The bank has also instructed BDCs to adhere to Know Your Customer (KYC) measures.

In a circular signed by W. J. Kanya, Acting Director of the Trade and Exchange Department, the CBN has set a weekly purchase limit of $25,000 for each BDC from authorised dealers.

“A BDC must approach its chosen Authorised Dealer Bank (ADB) and can only obtain the specified amount from that bank within a week. Violations of this condition will result in appropriate sanctions.

“The selling rate from Authorised Dealers to BDCs will be the prevailing rate at the Nigerian Foreign Exchange Market (NFEM) window,” the circular noted.

The CBN allows BDCs to sell foreign exchange cash acquired from authorised dealer banks to end-users at a rate no higher than a one per cent margin above the purchase rate. This one per cent margin applies to all funds sold by BDCs, regardless of their source.

Additionally, the CBN has mandated authorised dealer banks to submit weekly sales reports to BDCs using a specific format attached to the guidelines, which should be addressed to the apex bank.

All BDCs are required to provide daily reports on foreign exchange purchases from authorised dealer banks and other sources, as well as sales on the Financial Institutions Forex Reporting System (FIFX).

Moreover, the CBN has specified that funds purchased by BDCs must be disbursed for designated transactions, including Business Travel Allowance (BTA), Personal Travel Allowance (PTA), overseas school fees, and overseas medical fees.

It is emphasised that the maximum disbursement per transaction should not exceed $5,000 on a quarterly basis.

“Records of all transactions must be maintained by BDCs, including the Bank Verification Number (BVN) of the end-user and the endorsement of the amount disbursed in the beneficiary’s International Passport.

“It is crucial for Authorised Dealer Banks and BDC operators to ensure strict adherence to Anti-Money Laundering laws and appropriate KYC principles in managing these transactions,” the CBN stated.

The CBN further warned that any authorised dealer or BDC found to divert funds or violate these guidelines would face sanctions, including the suspension of their dealership licence.