No fewer than 2,780 of the total of 2,990 Bureau De Change Operators (BDCs) in Nigeria have been discovered to be unable to meet the foreign exchange requirement on Know Your Customer (KYC) stipulated by the Central Bank of Nigeria (CBN), investigations have revealed.
Consequently, the affected 2,780 BDCs were denied access to the new limit of $50,000 weekly forex sales by deposit money banks yesterday.
The implication is that Nigerians will find no ease in accessing forex for the purpose of Basic Travel Allowance (BTA), Personal Travel Allowance (PTA) as well as school and medical fees, through the BDCs as envisaged by the CBN in increasing weekly sales from $30,000 to $50,000 to the BDCs.
Responding to inquiry as to why only seven percent of BDCs were sold dollars by banks, Aminu Gwadabe, acting president of the Association of Bureau De Change Operators of Nigeria (ABCON), said, “the reasons giving by banks border on BDCs upgrade on KYC status, non-availability of dollars, and lack of rates among others”.
Banks are acting based on instruction from the Central Bank of Nigeria (CBN) on Know Your Customer (KYC), which is simply a process of verifying the identity of a customer by an enterprise.
When on July 22, this year, the CBN opened foreign currency sales window from the proceeds of international money transfers to BDCs, the regulator also instructed that the foreign currency proceeds of international money transfers sold to BDC operators shall be retailed to end users in compliance with the provisions of the anti-money laundering laws and observance of appropriate KYC principles, including the use of BVN.
A total of 210 out of 2,990 licenced BDCs nationwide have so far purchased foreign exchange from banks at the rate of between N328 and N353 per dollar.
In a move to enhance liquidity and help the local currency in the foreign exchange market, the Central Bank of Nigeria (CBN) and the Bankers Committee on Tuesday increased the amount of weekly dollar sales from banks to the BDC operators from $30,000 to $50,000.
But as at yesterday, banks were selling between $10,000 and $30,000 weekly at different rates. It was gathered that banks are yet to implement the $50,000 weekly sales.
Looking at the implication of the hike in weekly dollar sales to BDCs, Gwadabe said if available to BDCs nationwide, it will impact positively on the value of the naira, reduce parallel market activities, and checkmate hoarding and speculation.
Andrew Elueni, managing director/chief executive officer, Flawless Capital limited, who left the business when the CBN stopped dollar sales to BDCs, is thinking of resuming, following the increase in the volume of sales and the opening of the new window by the CBN.
The local currency yesterday closed stable at N394 against the dollar at the parallel market. It depreciated in value against the US dollar by N0.49k or 0.16 percent to close at N314.14k/$ yesterday from N313.65k/$ the previous day at the inter-bank foreign exchange market.