Why CBN Retained FirstBank as Sole Forex Dealer to BDCs

• Why CBN Retained FirstBank as Sole Forex Dealer to BDCs

It’s anybody’s guess how FirstBank Nigeria Limited was able to win the confidence of the Central Bank of Nigeria (CBN) which made the apex bank to retain the former as the major foreign exchange dealer to licenced Bureau de Change (BDC) operators in Nigeria.

The FBN Limited was able to achieve that laudable feat due to a combination of factors.

Checks revealed that the apex banks apparently miffed by failure to fully comply with the directive which requires commercial banks that act as agents of international money transfer operators to always sell foreign currency remittances to licensed BDC operators, had issued a circular last Wednesday where it relieved other banks of the role, and retained FirstBank Nigeria Limited as sole dealers to the BDCs.

The announcement by the CBN is coming on the heels of the FBN’s stable money transfer services as well as its strict compliance to CBN’s rules and directives on the sale of foreign exchange.

While all the affected banks are expected to sell their dollar inflows from remittances to Travelex, for onward sale to the BDCs.

How FBN Limited bested other banks

Investigation revealed that the Bank had consistently sold dollars to over 500 BDCs as directed by the CBN to improve dollar liquidity and strengthen the Naira in line with the new flexible foreign exchange policy.

The CBN took the decision because the returns on forex sales showed that the affected banks had not been active in selling the greenback to BDC operators since the directive was given in July.

Thus FBN Limited unlike other deposit money banks having proved its worth and mettle as a dependable ally to the apex bank became the standard bearer where others failed.

The FirstBank in a statement over the weekend described CBN’s pronouncement as a testament to the Bank’s strong financial base and its avowed support to the growth and development of a sustainable national economy.

The Bank’s Chief Financial Officer, Patrick Iyamabo, recently noted that the Bank will continue to strive to maintain its position as the safest and most respected banking franchise in the country.

He said:“We would continue to leverage our unique ability to grow and capitalize the institution – a testament to our solid track record. Our highest priority remains meeting the financing and banking needs of our customers, by providing world class services, knowledge and expertise to support them, even in very difficult times.”

The Bank said it remains committed to corporate governance principles and would continue to ensure that dollars sales to the BDCs continue in a seamless manner for ease of distribution to the end users.

While justifying the decision to remove the function of dollar remittance sales to BDCs from the other banks, the President of the Association of Bureau De Change of Nigeria (ABCON), Alhaji Aminu Gwadabe, said it was a big relief to the BDC operators.

Among other things, he said the move would help strengthen the naira and improve dollar liquidity in the market.

“It will ensure that more dollars are distributed to BDCs in uniform and transparent manner as some of the banks have not been selling funds from the international money transfer operators (IMTOs).

“If you check, since Travelex started selling to BDCs, speculation has reduced in the market and the naira is on the path of recovery. My advise to our members is to partner with the central bank on this project. I advice everybody to be patriotic, any member that goes against the rule would be punished,” Gwadabe said in a telephone chat.

Commenting on the suspension of his members, he said those affected would in the coming days ensure they renew licences for them to be reinstated in the market.

Travelex, a global foreign exchange company last week began weekly disbursements of US$15,000 (part of the country’s diaspora remittances) to each of the 3,000 registered Bureaux DeBDC) operators in the country.