Nigerian Bureau De Change Operators Weigh Merger Options Amidst CBN Regulations

As the Central Bank of Nigeria (CBN) proposes new regulatory guidelines for Bureau De Change (BDC) operators, Nigerian currency traders are contemplating mergers as a potential strategy to navigate the evolving regulatory landscape.

The proposed guidelines, outlined in a draft paper titled ‘Revised Regulatory And Supervisory Guidelines For Bureau De Change Operations In Nigeria,’ suggest significant increases in capital requirements for BDC operators, including a jump in share capital to N2 billion for Tier 1 licenses and N500 million for Tier 2 licenses.

Aminu Gwadebe, President of the Association of Bureau De Change of Nigeria (ABCON), highlighted the potential for consolidation within the industry as members grapple with the proposed regulatory changes.

Gwadebe explained the need for a temporary halt on issuing new licenses to allow existing operators to merge and form consolidated entities capable of meeting the stringent capital requirements.

Speaking with media Gwadebe noted that the proposed cautionary deposits, amounting to N200 million for Tier 1 and N50 million for Tier 2 licenses, were not in line with global practices for BDC operations.

He stressed the need for dialogue and review of the proposed figures, asserting that such high deposit requirements were unprecedented in the industry.

In anticipation of the CBN’s finalization of the regulatory guidelines, BDC operators are exploring various options to bolster their capital base.

Some operators have begun discussions about potential mergers to pool resources and meet the proposed capital thresholds, recognizing the challenges of raising substantial capital individually within a short timeframe.

As the regulatory landscape evolves, BDC operators are keenly observing developments and engaging in strategic deliberations to ensure compliance with regulatory requirements while sustaining their operations in Nigeria’s dynamic financial environment.