In a decisive move aimed at strengthening Nigeria’s foreign exchange market and ensuring compliance with regulatory standards, the Central Bank of Nigeria (CBN) announced the revocation of licenses for 4,173 exchange bureaus. This action comes in the wake of the central bank’s recent reforms to address foreign exchange shortages and enhance the integrity of financial transactions in the country.
Revocation Due to Non-Compliance
The revocation of licenses was primarily attributed to the failure of these exchange bureaus to adhere to CBN guidelines and directives. Among the breaches cited were the failure to submit returns of transactions and the non-payment of required renewal fees within the stipulated time frame. Additionally, some bureaus were found to violate anti-money laundering and terrorism finance regulations, further necessitating the action taken by the central bank.
In line with its commitment to promote a more transparent forex market, the CBN introduced new guidelines on February 23. These guidelines include the prohibition of street trading of foreign exchange and an increase in the minimum capital requirements for exchange bureaus to 2 billion nairas ($1.3 million). By imposing higher capital thresholds, the central bank aims to ensure that only financially stable and reputable entities operate within the sector, thereby safeguarding the interests of investors and consumers alike.
Mandatory Compliance Measures
Hakama Sidi Ali, spokesperson for the CBN, emphasized that compliance with the revised regulatory and supervisory guidelines is mandatory for all stakeholders in the sector.
“The CBN is revising the regulatory and supervisory guidelines for Bureau de Change operators. Compliance with the new requirements will be mandatory for all stakeholders in the sector when the revised guidelines become effective,”
Impact on the Forex Market
The measures taken by the CBN are likely to have a significant impact on Nigeria’s forex market. By revoking the licenses of non-compliant exchange bureaus and enforcing stricter regulations, the central bank aims to instill confidence among investors and foster greater stability in the exchange rate. Moreover, the crackdown on illegal street trading of foreign exchange is expected to curb illicit financial activities and promote a more orderly functioning of the market.
As the CBN continues to implement reforms aimed at strengthening Nigeria’s financial system, stakeholders in the Bureau de Change sector are urged to ensure full compliance with regulatory requirements. The central bank remains committed to promoting a transparent, efficient, and resilient forex market that supports economic growth and development. All participants in the sector must uphold the highest standards of integrity and professionalism to sustain the momentum of positive change initiated by the regulatory authorities.
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