ABCON seeks 40-week timeline for BDCs
THE Association of Bureaux De Change Operators of Nigeria (ABCON) has proposed a 40-week time table for bureaux de change (BDC) operators to meet the N35 million new minimum capital requirements set by the Central Bank of Nigeria (CBN).
On June 23, the Central Bank of Nigeria (CBN), among others, raised the minimum capital requirement of BDCs to N35 million from N10 million. It also raised the mandatory caution deposit to N35 million from $10,000.
On July 7, the apex bank extended the deadline from July 15 to July 31, in response to appeals and intervention of ABCON and both chambers of the National Assembly.
ABCON President, Alhaji Aminu Gwadabe said the proposal had been sent to the CBN Governor for approval.
He said though the apex bank has extended the deadline by three weeks to July 31, the time was too short to enable BDCs comply with the statutory and legal requirements of the new policy. The timetable, he said, contains actions needed to be taken to enhance the successful implementation of the CBN policy for the subsector.
According to Gwadabe, “The timetable starts with sensitisation seminars to educate members on various options to consider in meeting the minimum capital requirement. We plan to hold these seminars in each geo-political zone of the federation. Moreover, we would assist members scout for consultants to guide them on issues of valuation of existing companies in order to accommodate new members and or achieve harmonious merger. This is in line with what the CBN did for banks during the recapitalisation exercise of 2004”.
He said in addition to the 40- week timetable, the Association has also appealed to the CBN to take a critical look at the minimum capital requirement of N35 million and the requirement of N35 million as caution deposit, because both requirement implies that the apex bank has raised the minimum capital base of BDCs to N70 million, since the N35 million caution deposit would not be immediately refunded once it is deposited.
“Consequently, we have appealed to the CBN Governor to allow the minimum capital base to be at N35 million and the caution deposit at N5 million so as to source the caution deposit from the capital base of the company and the balance of N30 million be used as working capital of the BDCs.
“We have also appealed to the CBN to consider paying treasury bills interest rates on caution deposit to the BDCs, and because of volatility of the rate, an annual average rate could be used when crediting the interest due on the caution deposits.
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