The Central Bank of Nigeria (CBN) has issued a strong warning to Bureau de Change (BDC) operators and Authorized Dealer banks, stating that any diversion of funds or breach of its newly introduced foreign exchange (FX) trade guidelines will lead to the suspension of their operating licenses. The announcement was made in a statement signed by Dr. W.J. Kanya, Acting Director of the Trade and Exchange Department, as part of efforts to regulate FX transactions and ensure compliance in the Nigerian Foreign Exchange Market (NFEM).
Under the new rules, BDCs are required to purchase FX from only one preferred Authorized Dealer bank per week, and any breach of this condition will attract sanctions. FX cash purchased by BDCs must be sold to end-users at a rate not exceeding a 1% margin above the buying rate. Additionally, BDCs are restricted to disbursing funds for specific eligible transactions, including Business Travel Allowance (BTA), Personal Travel Allowance (PTA), overseas school fees, and medical fees, with each transaction capped at $5,000 quarterly.
The CBN also mandated that BDCs and Authorized Dealer banks maintain detailed records of transactions, including the Bank Verification Number (BVN) of end-users and endorsements in the beneficiary’s international passport. Weekly and daily returns on FX purchases and sales must be submitted to the CBN through designated channels.
The apex bank emphasized strict adherence to Anti-Money Laundering (AML) laws and Know Your Customer (KYC) principles in all transactions. Any violation of these guidelines, including fund diversion, will result in severe penalties, including the suspension of operating licenses.
This move by the CBN aims to curb malpractice, ensure transparency, and stabilize the FX market amid ongoing economic challenges. Stakeholders in the financial sector are urged to comply with the new regulations to avoid sanctions.
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