Thursday, November 4, 2010

CBN withdraws licences of bureaux de change in ‘class A’

THE Central Bank of Nigeria (CBN) has resolved to withdraw the licences of all existing Class ‘A’ Bureaux de Change (BDCs) with effect from November 8, 2010.

According to a statement, the withdrawal is part of measures to stem the gross abuses of the enhanced Class ‘A’ BDCs in line with the CBN’s avowed commitment to eradicate money laundering.

The Guardian gathered that the Class ‘A’ BDCs, whose licences have been so withdrawn are, however, free to apply for Class ‘B’ licence with the attendant privileges by fulfilling the stipulated licensing requirements. The CBN shall also, within 30 days, refund all mandatory caution deposits lodged with the bank by the affected firms.

The CBN had on February 26, 2009 restructured BDCs into categories A and B in order to further liberalise the foreign exchange market and enhance its allocative efficiency. The main objective was to facilitate end-user access to foreign exchange supply from official sources in order to boost economic growth by promoting productive efficiency of small and medium scale enterprises.

In the statement made available to The Guardian by the CBN’s Head of Corporate Communication, M. M. Abdullahi, the apex bank revealed that the latest appraisal of the policy initiative had 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.
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 has also been inundated with complaints from foreign countries that some Nigerian travellers indulge in cross-border transportation of large sums of foreign currency in cash. Indeed, returns from the Nigerian Customs Services on foreign currency declaration by travellers show that large amounts, up to U.S. $3 million in cash have been taken out of the country by individuals on single trip.