The Central Bank of Nigeria is reviewing some of the revoked licences of 236 Bureaux de Change operators with a view to ensuring that all complaints by affected companies are properly addressed.

The CBN had in January this year revoked licences of 236 BDCs. But the Director, Other Financial Institutions Department, CBN, Mr. Olufemi Fabanwo, told journalists in Lagos last week that the bank might reinstate some licences if it was proven that they had actually met the bank’s requirement prior to the revocation exercise.

Fabanwo said, “There is a requirement for granting licences to BDCs. One of those requirements is mandatory deposit.  The institutions that had not complied, their licences had to be suspended for that purpose. If it was proven that may be because the narration in the statement of account did not show their names but it was proven that prior to that revocation, they had actually paid the mandatory deposit, I think the appropriate department will consider the possibility of reinstating their licences or continue to allow them to operate.”

“But if they had not paid before the revocation, that means they got the licence under false pretence. That is, they gave inaccurate or false information. Those licences cannot be reinstated. But those who have evidence that prior to the revocation, they had actually paid, the appropriate department may consider. I am not saying will but may consider.”

The CBN director spoke at the opening of a two-day workshop entitled ‘Microfinance Banking and Financial Inclusion in Nigeria: Issues and Challenges’ organised by the Nigeria Deposit Insurance Corporation.

The director said the bank would leave no stone unturned to ensure that no unlawful company was allowed to resume operation.

The CBN had, through a circular on January 14, 2013, announced the withdrawal of the licences of 236 Class ‘A’ BDC operators.

The circular read in part, “This is to inform all authorised dealers and buyers (BDC operators) and the general public that the operating licences of the Bureau de Change companies stated below are hereby revoked, with effect from January 14, 2013.

“Consequently, all authorised dealers, buyers and the general public are advised that any foreign exchange transactions, including sale to and purchases from these BDCs, as well as transfer of funds through them and or on their behalf, is illegal.”

Some of the BDCs that got their licences revoked, according to the circular, are Acclaim, African Shelter, Afrinvest, Continental Finance Limited, Halal, Kano Agency, List and Naira Cheque.

Others are OMF, Planet, Safe, Sha’ada Fas, Sunlight, Taha, Third World, Vintage, Dual Currency, Sabon Ruwa and Sea BDC.

The CBN had, on November 3, 2010, in a circular referenced, FPR/DIR/CIR/FXM/01/004, cancelled the issuance of class ‘A’ BDC licences, following its review of the two-tier structure of the market.

The bank had said in a statement signed by its then Head of Corporate Affairs, Mr. Muhammed Abdullahi, that the latest appraisal of the policy initiative revealed gross abuses of the enhanced official funding of the Class ‘A’ category of the BDCs and the negation of the expected benefits to the economy.

The bank said in the statement, “The CBN has also been inundated with complaints from foreign countries that some Nigerian travellers indulge in cross-border transportation of large sums of foreign currencies in cash.

“Indeed, returns from the Nigeria Customs Service on foreign currency declaration by travellers show that large amounts, up to $3m cash, have been taken out of the country by individuals in single trips.”

It pointed out that the Class ‘A’ BDCs, whose licences had been withdrawn were, however, free to apply for Class ‘B’ licences, with the attendant privileges by fulfilling the stipulated licensing requirements.

The CBN had on February 26, 2009 restructured the BDCs into categories ‘A’ and ‘B’ in order to further liberalise the foreign exchange market and enhance its efficiency.

While also noting that some MFBs had yet to fully render returns to the apex bank, Fabanwo said plans were already in place to ensure that affected institutions did so before the end of the year.

According to him, only about 20 per cent of the MFBs have yet to start rendering their returns, a situation he says is caused by lack of management information system on the part of the institutions.

The CBN director said, “It is a critical thing that all institutions should render returns. It is true that not all of them have been rendering returns. But I think the performance has improved significantly. We have about 80 per cent of them rendering returns now.  The few that are not yet doing so is probably because they don’t have appropriate management information system in place to enable them to do it or they currently do not have sufficient skills for them to access our system. There is a system that we have created, which we called financial analysis system through which MFBs are able to render their returns.

“And we have been conducting some workshops for them to upscale their skills so that they can access the system. In a couple weeks, we will conduct a mop up exercise for them. Probably before the end of the year, almost all of them should have been able to comply.”

However, Fabanwo said the intervention of the CBN in the MFB sector in 2010 had led to significant improvement in the sector, noting that the sub-sector had become far better than what it used to be.

Source: Punch (by Oyetunji Abioye)