Advertisement
Advertisement

ABCON to CBN: Reduce capital base requirement from ‘N2bn to N500m’

ABCON to CBN: Reduce capital base requirement from 'N2bn to N500m' ABCON to CBN: Reduce capital base requirement from 'N2bn to N500m'

The Association of Bureau De Change Operators (ABCON) has called on the Central Bank of Nigeria (CBN) to review the minimum capital base for tier-1 operators to N500 million and tier-2 operators to N100 million.

Aminu Gwadabe, president of ABCON, made the request on May 28, during an emergency meeting of bureau de change (BDC) operators.

On May 22, CBN released the approved guidelines for BDC operations in the country.

The apex bank raised the capital requirement for tier-1 BDC operators from N35 million to N2 billion, while tier-2 operators were mandated to have a capital base of N500 million.

Advertisement

CBN also instructed existing BDCs to reapply for new licences.

Reacting to the new directive, which is expected to take effect on June 3, Gwadabe said the capital requirement for BDCs should be reviewed. 

“We’re not against the totality of their review of capital. We know inflation has reduced capital and we have to build capacity,” he said.

Advertisement

“We are saying tier-2 capital base should be N100 million for those that want to have a state-level licence instead of N500 million.

“Imagine, even if you want to take the option of a merger, you need about 15 BDCs. Why are we building a castle in the air when we don’t have a foundation?” 

Gwadabe said if the CBN reviews the capital base to N100 million for tier-2 operators,  three BDCs could merge, “even those not compatible”.

According to the ABCON president, although the operators’ capital base of N35 million is almost depleted, he said “for three years, we were not doing business”.

Advertisement

“For the N2 billion capital base — for those that want to have branches or franchise — we told them (CBN) we are proposing between N500 million and N1 billion,” he said.

‘RECAPITALISE, NOT REAPPLY’

Gwadabe urged the apex bank to allow BDCs to recapitalise instead of reapplying for licences.

He also said the timing for compliance should be extended to two years for fairness “like banks”.

Advertisement

“Even BDC operators with landed properties or other assets for sale to raise the funds will not be able to accomplish such within the time frame. Other sectors including banks have two years timeline. Such timeline should also be granted to BDCs,” he said.

“Existing BDCs to be allowed to use their generic names as against registration of new names at the Corporate Affairs Commission.”

Advertisement

Gwadabe said the terms of engagement for mergers and acquisitions should be properly explained to allow for inclusion.

Advertisement
Add a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Click on the link below to join TheCable Channel on WhatsApp for your Breaking News, Business Analysis, Politics, Fact Check, Sports and Entertainment News!

error: Content is protected from copying.