No fewer than four commercial banks yesterday disbursed the first batch of diaspora inflow-related foreign exchange (forex) to over 350 bureaux de change (BDCs), as directed by the Central Bank of Nigeria (CBN).
United Bank for Africa (UBA) Plc, First Bank, Fidelity Bank Plc and Ecobank Nigeria Limited, sold the regulatory $30,000 weekly to each of the beneficiary BDCs, nearly three weeks after they got the Central Bank of Nigeria (CBN) directive on the matter. About $10.5 million was disbursed to beneficiary BDC operators at the interbank rate.
In its effort to ensure stability of the exchange rate and to encourage participation of all critical stakeholders in the foreign exchange market, the CBN had directed through a circular to authorized dealers that all agents to approved International Money Transfer Operators (IMTOs) sell foreign currency accruing from inward money remittances to licensed BDCs.
The foreign currency proceeds of IMTOs sold to BDC operators shall be retailed to end users in accordance to CBN regulation. Only BDCs that have been cleared by the compliance department of the banks as fully compliant with the KYC requirement were allowed to buy.
The apex bank issued a follow-up circular to all the banks, asking them to sell dollar to BDCs. In the circular titled:
Re: Sales of Foreign Currency Proceeds of International Money Transfers to Bureaux De Change Operators, CBN Acting Director, Trade and Exchange, W.D. Goting, said the authorised dealers shall sell foreign exchange cash to BDCs subject to a maximum of $30,000 to a BDC per week.
He explained that a BDC shall nominate its preferred authorized dealer, a commercial bank, and can only procure the said amount from only that bank of its choice in a week. The CBN warned that any breach of this condition will attract appropriate sanction.
The commercial banks, which are the authorized dealers, have been giving stringent conditions to the BDCs finally bowed to pressure from both the CBN to disburse the first set of cash. Nearly 2,600 BDCs are yet to get their allocations, and are at different stages of documentation.
The banks had also obtained compliance set guidelines commitment from the BDCs before selling to them. Part of the commitment were that the BDCs would not purchase forex from any other bank, except its bank of choice; foreign currency cash purchased by the BDCs shall be sold to forex end-users at a rate not exceeding two per cent margin above the buying rate.
The BDCs also pledged to ensure that purchased funds would be disbursed to end users and for eligible transactions only and shall render weekly returns on purchases from the banks to Trade and Exchange Department of the CBN.
The BDCs further promised to ensure strict compliance to the provisions of the anti-money laundering laws observance of appropriate KYC principles in the handling of foreign exchange transactions.
Reacting to the development, President, Association of Bureau De Change Operators of Nigeria (ABCON) Aminu Gwadabe, said: “It is a good development and I am happy that our members are meeting the banks’ and CBN’s documentation requirement on the matter. I want the remaining operators to update their Know Your Customer details to enable them access their own funds”.
Gwadabe, who confirmed buying dollar from Ecobank Nigeria Limited, said some operators are yet to apply, urging the banks to extend the disbursements to BDCs operating outside Lagos.
“It is only in Lagos that we have seen disbursements. Kano, Abuja, Port Harcourt and Benin operators are yet to benefit. I want the banks to also extend the disbursements to BDCs across the country,” he said.