TheCable

Some Bureau De Change (BDC) operators have urged the Central Bank of Nigeria (CBN) to extend the deadline for the new capital requirement released for the industry, saying that the July 15 deadline is very short.

Speaking with NAN, they observed that failure to review the recapitalisation time frame could lead to the closure of many BDCs with loss of jobs, which will hamper economic growth.

They also queried the criteria used by the new governor of CBN for arriving at the time frame, stressing that commercial banks were given enough time to increase their capital base.

Also speaking, a managing director of a BDC, who pleaded anonymity, said that it would be difficult to raise N35 million within three weeks.

The operator said that even quoted companies on the Nigerian Stock Exchange (NSE) could not raise fresh capital within the stipulated time frame because of the long process of fund raising.

He said that BDCs were privately-owned and could only raise capital through private placement of shares to an individual or group of individuals.

According to him, no proprietor of BDC can get a buyer for a property within 30 days.

Another operator declared that the new capital requirement would not solve the problem of the industry.

“BDC does not require huge capital because they don’t give loans to people. They only buy currencies in accordance to CBN approval,” he said.

The operator, who blamed CBN for the rot in the industry, said that the government bank failed to adhere to its licencing procedure. He alleged that the apex bank approved licences to every “dick and harry” unlike when only professionals were given operational licence.

He alleged that many managing directors of BDCs could not read or write, noting that in the past promoters of BDCs were mandated to have a minimum of 10 years financial experience.

The operator said that profiteering in the industry would be solved through proper scrutiny and adherence to licencing rules and procedure.

On Sunday, June 22, CBN had released fresh guidelines for BDC operators and raised the operating capital base to N35 million from N10 million to check persistent depletion in the country’s external reserves.

It said the new guidelines would also help the bank to check the financing of unauthorised transactions as well as the ‘dollarisation’ of the Nigerian economy.

It added that the N35 million must be deposited in a non-interest-yielding account in the CBN subject to a grant of approval-in-principle.

In addition to the money, all BDCs applying for the new licence would be expected to make an application fee of N100,000; a licensing fee of N1 million naira and an annual renewal fee of N250,000.