The Central Bank of Nigeria (CBN) has released guidelines for the sale of foreign exchange (Forex) by Bureau De Change (BDC) operators within the country.
The Central Bank of Nigeria has ordered Bureau De Changes (BDCs) to pay 25 percent of foreign exchange purchased for Business Travel Allowance or Personal Travel Allowance in cash while the remaining 75 percent should be transferred electronically to the customer’s Nigerian domiciliary account or prepaid card.
However, the apex bank noted that such customers receiving
$500 or less than $500 should be paid fully in cash.
CBN also directed BDCs to retrieve resident customers’ Bank
Verification Number, BVN, or Tax Identification Number, TIN before carrying out
foreign exchange transactions.
CBN gave this direction today among others in its Revised
Regulatory Supervisory Guidelines for BDCs operations in Nigeria.
Section 5.0 of the guidelines stated: “A beneficiary of BTA
or PTA shall receive up to 25 per cent of the foreign currency in cash.
“In other words, at least 75 per cent of any sale of foreign
currency by a BDC shall be transferred to the customer electronically (to the
customer’s Nigerian domiciliary account or prepaid card).
“Notwithstanding ‘b’ above, a beneficiary of BTA or PTA of
the equivalent of $500 or less may receive his/her BTA or PTA in cash.”
On non- permissible activities, CBN said among other things: “A BDC or its franchisee shall not engage in the following activities: Street-trading, maintaining any type of account for any member of the public, including accepting any asset for safekeeping/custody; Taking deposits from or granting loans to members of the public in any currency and in any form;
“Retail sale of foreign currencies to non-individuals, except
for BTA International outward transfers; Engaging in off-shore business or
maintaining foreign correspondent relationship with any foreign establishment;
Opening or maintaining any account with any bank or financial institution
outside Nigeria;
“Acting as custodian of foreign currency on behalf of
customers; International inward transfers, except for operators that serve as
cash-out points for IMTOs; Borrowing sums which in aggregate exceed the
equivalent of 30 percent of its shareholders’ funds unimpaired by losses, in
the BDC’s audited financial statements of the preceding year; Engaging in
forwards, futures, options, or other derivative/speculative transactions;
“Obtaining foreign exchange from sources other than those listed in Section
4.0; Granting of loans and advances in any currency; Selling foreign exchange
on credit to any customer; Engaging in any trade-related import activities; Serving
as payment or collection agents on behalf of customers;
“Dealing in gold or other precious metals; Carrying on
capital market, insurance and/or pension sector activities; Establishing
subsidiaries; Any foreign exchange transaction that involves illicit financial
flows; Financing of political activities; All other businesses not expressly
permitted by this Guidelines; “Any other activity as may from time to time be
termed “non-permissible” by the CBN.”
On BVN and TIN retrieval, CBN stated: “Transactions by
residents shall only commence after electronic retrieval of the potential
customer’s BVN or TIN from the NIBSS or Federal Inland Revenue Service (FIRS)
databases, respectively, and the details confirmed to match with the potential
customer’s standard identification document.
“All transactions by non-residents shall only commence after
obtaining a copy of the potential customer’s passport identification document
and validation with the relevant Nigerian agency.
“For foreign currency cash purchases:
Sellers of $10,000 and above shall be required to declare
the source of the foreign exchange.
“For all customer-present transactions, all the Naira
proceeds shall be electronically credited or transferred to the same customer’s
naira account, or prepaid card.”