CBN Resumes Forex Sales to BDCs on Monday

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  • Operators to sell at N386/$1
  • New guidelines for payment service banks peg capital requirement at N5bn

Obinna Chima

Central Bank of Nigeria (CBN) Thursday announced that the gradual sale of foreign exchange (forex) to licensed Bureau De Change (BDC) operators would resume from Monday.

CBN, in a circular dated August 27, and addressed to all authorised dealers, BDC operators and members of the public, which was signed by its Director, Trade and Exchange Department, Dr. Ozoemena Nnaji, said the resumption of forex sales was part of efforts to enhance accessibility of the greenback, particularly to travellers following the announcement of the limited resumption of international flights.

Nigerian Civil Aviation Authority (NCAA) thursday said the resumption of international flights, earlier fixed for Saturday, had been shifted to September 5.

In another circular, obtained yesterday from its website, CBN reviewed its guidelines for the licensing and regulation of Payment Service Banks (PSBs).

In the circular signed by Director, Financial Policy and Regulation, Kevin Amugo, which was dated August 27, the apex bank pegged the minimum capital requirement for PSBs at N5 billion. They are also expected to deposit a non-refundable application fee of N500,000.

CBN, in the circular on forex sales to the BDCs, stated: “The Central Bank of Nigeria hereby wishes to inform the general public that gradual sales of foreign exchange to licensed BDC operators will commence with effect from August 31, 2020.

“Consequently, purchase of forex by BDCs shall be on Monday, and Wednesdays in the first instance.”

According to the apex bank, BDCs are expected to “ensure that their accounts with the banks are duly funded with the equivalent naira proceeds on Fridays and Tuesdays accordingly.”

“Meanwhile, authorised dealers (deposit money banks) shall continue to sell foreign currencies for travel-related invisible transactions to customers and non-customers over the counter upon presentation of relevant travel documents (passport, air ticket and visa).

“All authorised dealers and BDC operators are hereby advised to ensure strict compliance with the provisions of the extant regulations on the disbursement of foreign exchange cash to travellers, as any case of infraction will be appropriately sanctioned,” it stated.

In another circular titled: “Weekly Exchange Rate for Disbursement of Proceeds of International Money Transfer Service Operators (IMTSOs),” also signed by Nnaji, CBN specified the various rates.

The applicable exchange rates for the disbursement of IMTSOs’ proceeds would be from August 31 to September 4.

According to CBN, IMTSOs are expected to sell their dollar proceeds to banks at N382/1$; while the banks are to sell to CBN at N383/$1.
Also, the rate CBN would sell to BDCs was fixed at N384/$1 and BDCs are to sell to end-users at not more than N386/$1.

“Kindly note that the GBP (British Pound) rate should be derived from the US dollar cross rate on the date of the sale,” it stated.

In a major policy coup, CBN this week, had moved to arrest the age-long practice of over-invoicing, which unscrupulous businesses have used to cart away the nation’s forex, directing banks and other authorised dealers to desist from opening Forms ‘M’ whose payment are routed through a buying company, agent, or other third parties.

 

  • CBN Reviews Guidelines for Licensing Payment Service Banks

CBN has reviewed its guidelines for the licensing and regulation of Payment Service Banks (PSBs).
It pegged the minimum capital requirement for PSBs at N5 billion and they are expected to deposit a non-refundable application fee of N500,000.

In addition, the operators are expected to pay non-refundable licensing fee of N2 million as well as change of name fee of N1 million.
“The CBN may vary these requirements from time to time. Promoters should note that in compliance with the BOFIA, the investment of the share capital deposit shall be subject to availability of investment instruments.

“Upon the grant of license or otherwise, the CBN shall refund the sum deposited to the applicant, together with the investment income, if any, after deducting administrative expenses and tax on the income,” it added.

PSBs are to be supervised by CBN. However, where a PSB is a subsidiary or associate of a legal entity, the entity shall be required to comply with all extant CBN guidelines and circulars as they relate to PSB’s operations, the statement said.

“PSBs shall render quarterly returns indicating the number of financially excluded customers on-boarded during the quarter to which the returns relate.

“PSBs shall render such other returns, in such format and frequency, as the CBN may prescribe from time to time. All PSBs shall be required to interface with the Nigeria Inter-bank Settlement System (NIBSS) platform in order to promote interconnectivity and interoperability of operations within the Nigeria banking system.

“The rate of charges to be imposed on any CBN regulated institution and/or their customers on mobile payment and other payment platforms by a parent/associate/related entity of any PSB shall be subject to the provisions of the Guide to Charges by Banks, Other Financial and Non-bank Institutions where applicable or subject to prior written approval of the CBN as the case may be,” the document added.