CBN mandates BDCs to sell unutilised FX to NFEM within 24hrs

•May confiscate unutilised balance

By Elizabeth Adegbesan

The Central Bank of Nigeria, CBN, has directed Bureau De Changes, BDCs, to sell unutilised foreign exchange (FX) balances to the Nigerian Foreign Exchange, NFEM, market within twenty-four (24) hours of the expiry of the utilisation period.

The apex bank disclosed this in its regulatory guidance on purchase of FX by BDCs through authorized dealer banks in NFEM.

According to the apex bank, “BDCs are not permitted to retain in their possession any foreign exchange purchased from the NFEM that remains unutilised. All unutilised balances shall be sold back to the NFEM market within twenty-four (24) hours of the expiry of the utilisation period.

“Failure to comply shall attract regulatory sanctions including but not limited to forfeiture of the unutilised balance and suspension of the BDC’s NFEM access.

‘‘BDCs shall disclose any unutilised balance from the prior week in each new purchase request submission.

“Authorised Dealer Banks shall factor disclosed unutilised balances into their weekly cap calculations.”

CBN said further that this guidance aims at facilitating seamless implementation of the framework and support sustained liquidity in the retail segment of the foreign exchange market.

The apex bank also prohibited third party transactions saying, “Foreign exchange purchased by a BDC shall be credited only to the BDC’s registered settlement account.

“Disbursement to any account other than the BDC’s own registered account shall constitute a regulatory violation and shall be reported immediately to the CBN.”

CBN noted that only BDCs in possession of a valid and subsisting CBN licence shall be entitled to access foreign exchange under this framework.

The apex bank, however, excluded BDCs under regulatory sanction, whose licences are suspended, or whose operating conditions have been restricted by the CBN, from participation until such restrictions are lifted.

The apex bank also mentioned that it shall maintain a centralised portal, the FX BDC Purchase Tracker (FXBT), to which all BDCs shall be registered and submit real-time or same-day data on BDC purchases, enabling systemic compliance and oversight.

It also warned that no Authorised Dealer Bank should impose exclusivity arrangements, referral fees, or any condition that restricts a BDC’s freedom to select its preferred counterparty bank.

The apex bank warned that violations of the provisions of the Circular and the attached Guidance shall attract appropriate regulatory sanctions.

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