The Central Bank of Nigeria (CBN) has introduced new guidelines limiting Bureau de Change (BDC) operators to purchasing a maximum of $25,000 per week from a single authorized dealer bank.

This initiative aims to regulate the retail foreign exchange market and promote transparency.

The directive, issued in a circular from the Trade and Exchange Department and signed by acting Director Dr. W. J. Kanya, takes immediate effect.

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The circular mandates that BDCs select one authorized dealer bank per week for their forex allocation, preventing them from sourcing funds from multiple banks.

“Authorized dealers shall sell foreign exchange cash to BDCs subject to a maximum of USD25,000.00 to a BDC per week.

A BDC shall approach its preferred authorized dealer bank and can only procure the said amount from only that bank of its choice in a week. Any breach of this condition will attract appropriate sanction.

The selling rate by the Authorized Dealers to BDCs shall be the prevailing day rate at the NFEM window,” the circular stated.

The CBN warned that any BDC violating this rule would face appropriate sanctions. It also required that forex be sold at the prevailing rate in the Nigerian Foreign Exchange Market window to ensure price consistency.

To curb excessive pricing, the CBN imposed a one per cent cap on the margin BDCs can charge end-users above their purchase rate.

This restriction applies to all forex sold by BDCs, ensuring consumers are not subjected to exorbitant charges.

The guidelines also introduce strict reporting requirements for both BDCs and authorized dealer banks. Banks must submit weekly reports on forex sales to BDCs via a specified format to the CBN Trade and Exchange Department, while BDCs must render daily returns on forex purchases and sales through the Financial Institutions Forex Reporting System.

The CBN further restricted the use of BDC-purchased forex to specific transactions, with a quarterly disbursement cap of $5,000 per end-user. Eligible transactions include business and personal travel allowances, overseas school fees, and overseas medical fees.

To strengthen anti-money laundering measures, the CBN directed BDCs to maintain proper records of all transactions, including the Bank Verification Number of end-users and an endorsement of the amount disbursed in the beneficiary’s international passport.

The bank reiterated the need for strict adherence to Anti-Money Laundering laws and Know Your Customer requirements. It warned that any authorized dealer bank or BDC that diverts funds or violates the guidelines will face severe sanctions, including suspension of their dealership licence.