The Association of Bureau De Change of Nigeria (ABCON) has responded to the recent directive issued by the Central Bank of Nigeria (CBN) regarding the proposed increase in share capital requirements for Bureau De Change (BDC) operators. Aminu Gwadabe, the president of ABCON, expressed concerns over the suggested operating principles, stating that if implemented, association members would consider mergers to meet the new requirements.
The CBN had earlier proposed raising the share capital of BDC operators to N2 billion and N500 million for Tier 1 and Tier 2 licenses, respectively. Additionally, the directive includes caution deposits of N200 million for Tier 1 and N50 million for Tier 2 licenses.
Gwadabe emphasized that BDCs are not engaged in deposit-taking operations, making the suggested cautionary deposit an anomaly. He stated that such practices are not common globally and called for a review of the proposed figures, highlighting the need for more realistic and industry-appropriate requirements.
ABCON is advocating for a general license hold, suggesting that existing license holders be allowed to consolidate their operations without the issuance of new licenses. This approach would facilitate the formation of mega, consolidated operations in cash sale and ownership structure, according to Gwadabe.
Following nationwide zonal meetings involving over 5,000 ABCON members, a committee will be formed to discuss and determine the industry’s stance regarding the CBN’s proposals. Gwadabe emphasized the importance of soliciting feedback from industry stakeholders and commended the CBN for sharing a draft framework for the BDC subsector to facilitate dialogue and input.
He underscored the dynamic nature of regulatory reforms, likening them to the consolidation process experienced in the microfinance banking sector. Gwadabe affirmed ABCON’s commitment to embracing reforms and ensuring the sustainability and growth of the BDC industry.
ABCON’s members will critically examine the proposed licensing requirements and other elements of the regulatory framework, contributing to ongoing discussions and providing valuable feedback to the CBN.
In conclusion, ABCON reiterated its commitment to promoting transparency, efficiency, and compliance within the BDC sector, emphasizing the importance of constructive dialogue between regulators and industry stakeholders to achieve mutually beneficial outcomes.
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