CBN rakes in N0.87b from penalties on 437 BDCs

The Central Bank of Nigeria (CBN) will be making about N874 million as proceeds from sanctions imposed on 437 Bureau de Change Operators (BDCs) for failing to remit returns to it.

Each of the 437 BDCs will be coughing out N2million to the regulator for failing to account properly for their monthly rendition, which is against regulations.

Speaking to Hallmark at the weekend, the President, Association of Bureau de Change Operators of Nigeria (ABCON, Alhaji Aminu Gwadabe, said this move by the apex bank would negatively impact the nation’s currency.

“My comment and suggestion to the CBN is that rather than demobilize the affected BDCs for non-rendition, it should deduct the penalty from their cautionary deposit, because the measure it is adopting will further weaken the already fragile naira,” he posited.

As part of the sanction contravening the CBN regulations on rendition of monthly returns to the apex bank, the affected BDCs have been barred from participating in its weekly dollars sales from the foreign exchange market.

They will also forfeit the $30,000 weekly allocations the CBN gives operators.

The CBN had in January 2014 directed that authorized forex dealers and BDC operators should continue to render weekly returns on their transactions to it and other relevant authorities, failing, which will attract sanctions, including, revocation of operating license.

The apex bank gave this directive after it dropped the $250,000 ceiling placed on the foreign exchange sales to BDCs as part of steps to shore up liquidity in that segment of the market.

Hallmark also recalled that the apex bank in 2013 wielded its hammers on 20 BDCs for failure to render returns on their foreign exchange utilisation.

Among other offenders that made the CBN to revoke the licenses of the 20 BDCs was that they failed to provide documentary evidence that their purchases were utilised for eligible transactions in accordance with the relevant provisions of the Money Laundering Prohibition Act.

The regulator stated that its sanctions against erring BDCs are meant to serve as deterrent other operators and demonstrate that it would tolerate corrupt practices in the country’s financial system.