Following their 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 Bureau De Change (BDC) operators, the Central Bank of Nigeria (CBN) yesterday relieved other banks of the role, and exonerating FirstBank Nigeria Limited.
THISDAY learnt from a reliable source in the banking industry that a circular to that effect was sent to the banks wednesday.
However, all the affected banks are expected to sell their dollar inflows from remittances to Travelex, for onward sale to the BDCs.
According to the source, 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.
She also said it would help “remove the huge inflows from remittances the banks have been sitting on.”
This is just as THISDAY learnt that the apex bank wednesday also suspended a total of 195 BDC operators, over failure to renew their operating licences.
Speaking in the decision to remove the function of dollar remittance sales to BDCs from the other banks, the President of the Association oof Bureau De Change of Nigeria (ABCON), Alhaji Aminu Gwadabe, welcomed the move by the central bank.
He said it would help strengthen the naira and improve dollar liquidity in the market.
“It will ensure that more dollar 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.
Travelex was officially directed by the CBN to distribute FX to BDC operators following complaints from BDCs of low supply from the banks.
The naira closed at N467 to the dollar on the parallel market wednesday, slightly stronger than the N468 to the dollar it closed on Tuesday. On the interbank FX market, the spot rate of the naira remained unchanged at N304.50 to the dollar wednesday.
“Clearly, the involvement of Travelex is an attempt to reduce the premium at which dollars are being sold on the parallel market relative to the interbank market by improving supply.
“Based on our calculations, no more than US$45 million in remittance inflows will be sold to the 3,000 BDCs each week. CBN balance of payments data show that Nigeria receives around US$20 billion per annum in remittances which equates roughly US$380 million per week. As such, only about 12 per cent of remittance,” analysts at the CSL Stockbrokers stated.