The Association of Bureaux De Change of Nigeria (ABCON) has announced a significant development regarding the recapitalization of Bureau de Change (BDC) operators in Nigeria. During a virtual meeting held on Monday, ABCON President Aminu Gwadebe disclosed that the Central Bank of Nigeria (CBN) has extended the deadline for existing BDCs to meet new capital requirements by an additional six months. Originally set for December 2024, the new deadline is now June 3, 2025. This extension comes as a relief to BDC operators tasked with navigating and adhering to the recent regulatory adjustments imposed by the CBN, who has mandated that all existing BDCs reapply for new licenses in alignment with their selected categories—Tier 1 or Tier 2 BDCs—while also meeting the requisite minimum capital requirements.
The new operational guidelines introduced by the CBN in May indicate that Tier 1 BDCs are required to possess a capital base of ₦2 billion, whereas Tier 2 companies need a capital base of ₦500 million. Additionally, operators must pay non-refundable licensing fees amounting to ₦5 million for Tier 1 licenses and ₦2 million for Tier 2 licenses, respectively. In this context, Gwadebe noted that a number of BDCs have already begun to comply with these new directives. He expressed gratitude towards the CBN for the six-month extension, emphasizing that it would allow BDCs more time to strategize their recapitalization while acknowledging that cooperation between the CBN and BDC operators is essential for a smooth transition.
The ABCON President further emphasized that the deadline extension is specifically for existing operators, while new applicants seeking to establish BDCs will not be bound by this timeline but will have an indefinite period to achieve the licensing process. This distinction is crucial as it allows newly interested parties to consider entering the market without the immediate pressure of compliance. Gwadebe urged existing BDC operators to embrace the potential benefits of recapitalization, recognizing the various opportunities that can arise from increased capital base and improved operational capabilities.
At the heart of these regulatory changes is the CBN’s ambition to enhance the operational framework of BDCs, empowering them with an expanded capacity to engage in foreign currency transactions. The regulations now allow BDCs to source foreign currency from a wider array of channels, sell foreign exchange, and establish both foreign currency and naira accounts with commercial banks as well as non-interest banks. This framework also opens avenues for collaboration with banking partners, which may include issuing prepaid debit cards, thus modernizing the services offered by BDCs and positioning them more competitively within the financial sector.
The virtual meeting was well-attended, featuring over 220 CBN-licensed BDCs, council members from ABCON, and various stakeholders within the financial ecosystem. Such participation indicates the level of engagement and concern among BDC operators regarding the CBN’s developmental initiatives. Throughout the meeting, Gwadebe reinforced a message of unity and collaboration, encouraging member BDCs to remain focused on achieving compliance with the new capital requirements, while also approaching the recapitalization as an opportunity for growth and enhanced service delivery.
In conclusion, the adjusted deadline for recapitalization by the Central Bank of Nigeria represents a significant development for the Bureau de Change sector in Nigeria. By extending the timeline to June 2025, the CBN not only mitigates immediate pressure on existing operators but also fosters a cooperative environment where regulatory compliance can be achieved more effectively. As the BDCs work toward meeting new requirements, they are encouraged to explore the multitude of opportunities that lie within enhanced operational capabilities and improved financial frameworks, ultimately fostering a more robust and responsive foreign exchange market while integrating innovative banking partnerships.
