The Central Bank of Nigeria (CBN) has introduced new guidelines for Bureau de Change (BDC) operators, aimed at tightening the management and transparency of foreign exchange transactions. In a circular issued on Wednesday, February 5, 2025, the CBN outlined stricter measures that all BDCs must adhere to, including a weekly purchase limit of $25,000 and enhanced Know Your Customer (KYC) protocols.
Signed by the Acting Director of the Trade and Exchange Department, W.J. Kanya, the circular stated that BDCs are now required to purchase foreign exchange from a single authorised dealer per week. The designated dealer must be an authorised bank, and any breach of this rule will result in appropriate sanctions. The CBN emphasized that the selling rate to BDCs would be determined by the prevailing rate at the National Foreign Exchange Market (NFEM) window on the day of purchase.
Additionally, the new guidelines stipulate that BDCs can only sell foreign exchange to end-users at a rate not exceeding a 1% margin above the buying rate. This margin applies to all funds retailed by BDCs, regardless of the source of funds.
To further enforce transparency and accountability, the CBN has directed authorised dealer banks to submit weekly reports detailing their sales to BDCs. These reports must follow a specific format attached to the circular and be submitted to the apex bank. Additionally, BDCs are required to submit daily reports on their foreign exchange purchases and sales, including those sourced from authorised dealer banks and other channels, through the Financial Institutions Forex Reporting System (FIFX).
The CBN has also outlined specific guidelines for the disbursement of funds purchased by BDCs. These funds are to be allocated for specific transactions, such as business and personal travel allowances, overseas school fees, and medical fees. However, the maximum disbursement per transaction is capped at $5,000 per quarter. BDCs are required to maintain detailed records of all transactions, including the Bank Verification Number (BVN) of the end-user and endorsements in the beneficiary’s international passport.
The apex bank reiterated the importance of adhering to Anti-Money Laundering (AML) laws and KYC principles in all transactions. BDCs and authorised dealers are expected to ensure full compliance to prevent illicit activities in the foreign exchange market.
In conclusion, the CBN has made it clear that any breach of the new guidelines, including the diversion of funds or failure to adhere to the KYC and AML provisions, will result in severe penalties, including the suspension of dealership licenses. These new measures reflect the CBN’s ongoing efforts to stabilise the foreign exchange market, enhance transparency, and reduce the risks of financial crimes.
