CBN orders BDCs to offload unused forex within 24 hours

The Central Bank of Nigeria ( CBN) has introduced fresh rules requiring Bureau De Change operators to return any foreign exchange purchased but left unused within 24 hours after the permitted utilisation period ends.

The directive forms part of a new regulatory framework governing how BDCs obtain foreign exchange from authorised dealer banks through the Nigerian Foreign Exchange Market.

Under the new guidelines, the apex bank said operators would no longer be allowed to keep unused foreign exchange in their accounts beyond the stipulated timeframe.

It stated, “BDCs are not permitted to retain in their possession any foreign exchange purchased from the NFEM that remains unutilised. All unutilised balances shall be sold back to the NFEM market within twenty-four (24) hours of the expiry of the utilisation period.

“Failure to comply shall attract regulatory sanctions including but not limited to forfeiture of the unutilised balance and suspension of the BDC’s NFEM access.

“BDCs shall disclose any unutilised balance from the prior week in each new purchase request submission.

“Authorised Dealer Banks shall factor disclosed unutilised balances into their weekly cap calculations.”

According to the CBN, the measures are intended to improve the implementation of the foreign exchange framework and strengthen liquidity in the retail end of the market.

The regulator also outlawed third-party transactions involving foreign exchange acquired under the scheme.

It said, “Foreign exchange purchased by a BDC shall be credited only to the BDC’s registered settlement account.

“Disbursement to any account other than the BDC’s own registered account shall constitute a regulatory violation and shall be reported immediately to the CBN.”

The guidelines specify that only Bureau De Change operators holding valid and current CBN licences will qualify to purchase foreign exchange through the framework.

However, firms whose licences have been suspended, those under regulatory sanctions or those operating under restrictions imposed by the CBN will remain barred from accessing the market until the sanctions are lifted.

To strengthen oversight, the apex bank said it would operate a centralised monitoring platform known as the FX BDC Purchase Tracker (FXBT). Through the portal, all participating BDCs will submit real-time or same-day records of their foreign exchange purchases to aid compliance monitoring.

The CBN also cautioned authorised dealer banks against practices that could limit competition among BDCs.

It warned that banks must not impose exclusive dealing arrangements, referral charges or any conditions that prevent BDCs from choosing their preferred counterparty banks.

The apex bank added that breaches of the circular or any part of the accompanying regulatory guidance would attract appropriate sanctions.