CBN To Track BDCs Forex Sales

The Central Bank of Nigeria, CBN has introduced a stricter compliance measure for Bureau de Change operators purchasing foreign exchange from approved dealer banks in the country, a move stakeholders insist will tighten control on the forex market.

The CBN said the new framework is intended to enhance efficiency, transparency and liquidity , saying that violation by BDC s and participating bank will attract severe sanctions.

The government controlled  bank made this known in a circular issued recently.

Under the new framework, the CBN stated that all licensed BDCs will now be tracked on a central electronic portal known as the FX BDC Purchase Tracker, FXBT, as BDC firms wishing to purchase forex are now required to submit a Purchase Request electronically via banks’ designated portals.

“A BDC wishing to purchase foreign exchange shall submit a Purchase Request electronically via the Bank’s designated portal (FX Purchase Tracker Portal) to the chosen Authorized Dealer Bank, ensuring all mandatory fields are adequately completed,” the banksaid

According to the apex bank, in the circular dated July 15 and signed by its Director, Trade and Exchange DepartmentAderinola Shonekan, the implementation of the guideline is with immediate effect, saying the guidelines is in furtherance of an earlier circular issued on February this year.

The Yemi Cardoso-led bank stressed that only BDCs with valid and subsisting licences from the CBN will be eligible to purchase forex under the new regime, adding that BDCs whose licenese have been suspended or redistricted will not be eligible to operate under the framework until their sanctions are lifted.

“The Guidance announces the implementation of the electronic portal to facilitate the interaction between BDCs and the NFEM and outlines, among others, the eligibility requirements for participating BDCs, purchase request procedures, confirmation and settlement processes, reporting obligations, weekly purchase limits, treatment of unutilized balances, and compliance responsibilities of Authorised Dealer Banks and BDC operators,” the CN said in the circular.

It stressed that commercial  banks are required to obtain and retain each BDC’s licence certificate, tax identification number (TIN), Corporate Affairs Commission (CAC) incorporation documents, beneficial ownership information and contact details of principal officers.

They are also expected to conduct enhanced due diligence on higher-risk operators and update KYC records at least once a year or whenever there is a material change in ownership or management.

“No foreign exchange shall be disbursed to any BDC that has not satisfied the Bank’s KYC and due diligence requirements,” the CBN said.