CBN, ABCON in FX Market Regulatory, Control Roles

In recent years, the Bureaux De Change (BDCs) have supported Nigeria’s growth agenda, the Central Bank of Nigeria (CBN’s) commitment to exchange rate stability and regulation for the industry. They have played stabilizing roles in the retail end of the nation’s foreign exchange market.

Against the backdrop of these efforts to contribute to the economic development of Nigeria it appears out of order when a section of stakeholders in the sub-sector create contrary impression, especially as regards illicit forex traders.

The leadership of the Association of Bureau De Change Operators of Nigeria, ABCON, is backing the CBN in the ongoing investigation of some corporate bodies and individuals. It also believes that money laundering through the BDCs or any other financial institution is unacceptable and those found wanting should be punished based on the law.

ABCON believes and has supported the need to tighten and strictly enforce regulations in the foreign exchange market, and taken steps to punish erring members including recommending them to the CBN for sanctions.

Besides, the CBN has been effective in regulating the BDC sector.

ABCON President, Alhaji Aminu Gwadabe, had noted that the association does not agree with some stakeholders that the CBN has been “inexcusably weak in enforcing its own rules”, as the regulator has in the past, fined erring BDCs and in some extreme cases, withdrawn their operating licenses.

He said that contrary to views from certain quarters, the resumption of dollar sales to BDCs has led to nearly N40 appreciation of the naira in the first week of the exercise, and saved the local currency from continued depreciation.

He said the CBN’s aim of easing pressure on supply and firming up the naira succeeded and will continue to be achieved with improved liquidity in the market.

He stated further: “The N2 margin earned by BDCs from every dollar sold is barely enough to cover their operating costs and keep over 15,000 Nigerians employed by the sector, hence the assertion that BDCs business is one of the lucrative business in the country is wrong.”

Gwadabe also said that the call for a moratorium on licensing new BDCs is unacceptable as any new operator that meets the requirement for registration should be given the opportunity to operate.

The ABCON boss said that BDCs operate only within the allowable scope of transactions ie PTA, BTA, School fees, medicals, among others adding that BDCs all over the world are important retail sector of the foreign exchange market.

He explained, “The BDCs in Nigeria have over the years remained the most portent tool of exchange rate stability management of the CBN when ever the local currency suffers as seen in 2006, 2009, 2016 and 2020. The BDCs are not illegal operators but licensed with CAC and CBN and pay levies and taxes to the government. The over 5000 BDCs have created huge employment opportunities and remained a big threat to over one million unlicensed operators whose activities are usually misconstrued to represent the licensed players.

The BDC sector is regulated by the CBN via its various enabling laws which applies to all financial institutions. This include the CBN Act, BOFIA, Anti-Money Laundering and Counter Financing Terrorism guidelines, Know Your Customer (KYC) Requirements.

In addition to these is the CBN Guidelines on the Operations of BDCs, which is specific to the scope and operations of the BDCs. To ensure compliance, the CBN requires that each licensed BDC render returns on periodic basis (Daily, Weekly, Monthly and annually). Furthermore, BDCs are also required to render returns to the Nigeria Financial Intelligence Unit (NFIU), which plays a major role in the country’s Anti-Money Laundering, Counter-Terrorist Financing and Counter-Proliferation Financing (AML/CFT/CPF) efforts.

Furthermore, ABCON created an online platform,, an online real time rendition of returns. The platform is presently used by over 4000 licensed BDCs to render returns to the CBN and NFIU.

Also, to ensure compliance with the Know-Your Customer (KYC) requirement, a critical element of the anti-money laundering guidelines, ABCON partnered with the Nigeria Interbank Settlement System (NIBSS), to onboard BDCs on the NIBSS platform for verification of customer information.

In addition to the above, and also to ensure transparency, ABCON created, an online live exchange rate platform, which also contains the addresses and contacts of all licensed BDCs. The platform publishes the ruling exchange rate in the retail foreign exchange segment, so as to ensure, forex end have reliable information to guide them in their transactions with BDC operators.

Gwadabe said ABCON is playing stronger role in the BDC industry by embracing effective self-regulation and ensuring compliance with extant Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) laws and regulations to mitigate the risks and vulnerabilities in the sub-sector.

He said that ABCON has also developed an implanting Code of Conduct for members to promote ethical practices and transparency in while also continually advising the apex bank on market intelligence on key industry issues.

He said that ABCON had consistently advised BDCs to put in place and implement a system of internal policies, procedures and controls including Know Your Customer, Customer Due Diligence and reporting of all suspicious transactions to regulators.

According to Gwadabe, ABCON is also training BDCs on regular basis on the need to keep transaction records, and get a designated compliance officer that has day-to-day oversight over AML/ CFT programme. He said the Compliance Officers have been taught the rules in preparing Suspicious Transaction Reports (STRs), and rendering STRs’ returns to the Nigeria Financial Intelligence Unit (NFIU).

Giving more insight into the role of ABCON in Nigeria’s economic development, the ABCON Executive Council, had said that while BDCs are licensed to offer retail, across the counter, foreign exchange transactions, they also play critical roles in the economy and have contributed to the economic development of the country like ensuring order and confidence in the forex market, providing data for monetary policy, channels for CBN Intervention in Retail forex market and creation of over 15,000 jobs among others.

Gwadebe, advising on the way forward said, “ABCON assures the public of its commitment to orderly conduct of retail forex transactions as defined and regulated by the CBN for licensed BDCs. Members of the public are strongly advised to always patronize license BDCs and for this purpose they should visit and for the list and contact of licensed BDCs.”

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