The
Central Bank of Nigeria (CBN) has warned Bureau de Change (BDCs)
operators against failure to make timely report on its operations to
the regulator. Director of Trade and Exchange of the CBN, Batari Musa,
in his message in the 2011 annual general meeting of the Association of
Bureau de Change Operators of Nigeria (ABCON) held in Lagos emphasised
the need to make accurate report in order for the regulator to carry
out its function of monitoring of foreign exchange sales. “Send in your
returns as at when due, and correctly too. You need to do that if you
want to remain in this business,” he said.
Mr.
Musa, who was represented by W. Gotring, a deputy director in the
department, said BDC operators must adhere to the threshold of their
transactions, which is currently pegged at $50,000 per trade. “Eligible
transactions are those you should concentrate on. You know policies are
taken on the basis of developments in an industry. If for any reason
exchange occurs that the management is uncomfortable with, then you
know the consequence is that decisions will be taken that will affect
your operations.”
Daily rendition of returns
The Central Bank in July 2009 introduced the Electronic Financial
Analysis and Surveillance System (EFASS) as the platform on which BDCs
would make their daily rendition of returns, which is a condition for
participation in the official segment of the foreign exchange market.
“With effect from July 23, 2009, rendition of return via e-mail is null
and void and such returns would be disregarded,” the CBN stated in a
circular on July 22, 2009 to all operators.
The
president of ABCON, Emmanuel Balogun said the relative stability in the
foreign exchange market in the last one year has been due to the stance
of the CBN to defend the naira. He said the body, as a self regulatory
organisation was keen to ensure that its members adhere to the
guidelines on foreign exchange transactions. “ABCON has appointed 10
independent examiners to go round to our members to verify the status
of every BDC that is registered with the association and ascertain
their compliance level with supervisory and regulatory provisions,” he
said in his address to members.
He
assured them that the central bank would soon increase the threshold of
foreign exchange supply from the prevailing $50,000 to $200,000. This
would enable BDC operators to participate more in the forex market.
The
CBN last November scrapped the categorisation of BDCs which had been
operational since February, 2009. According to the regulator, the
categorisation which was done in order to liberalise the foreign
exchange market and enhance its efficiency had been abused. “Available
information also revealed that the target end-users have been
sidelined, while large transactions that should have been channelled
through the banking system have been carried out through Class ‘A’
BDCs,” the CBN said in the statement announcing the revocation of 50
BDCs which were operating under the class A category. There are
currently about 1,800 registered BDC operators in the country, with the
majority of them based in Lagos.
