CBN Revokes 4,173 BDC Licenses: A Closer Look at Regulatory Breaches and Implications

The Central Bank of Nigeria (CBN) recently announced the revocation of operating licenses of 4,173 Bureaux De Change (BDCs) operators over violation of regulatory guidelines.

This move comes as the apex bank revises the regulatory and supervisory guidelines for BDC operations in the country, emphasizing compliance with Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and Counter-Proliferation Financing (CPF) regulations.

CBN Governor Olayemi Cardoso reassured foreign investors that outstanding FX liabilities of five remaining banks would be settled within a few days.

He also mentioned that Nigeria had attracted $2 billion in foreign portfolio inflows this year, and expects the nation’s foreign reserves to appreciate further in the coming months.

In a recent OMO auction, the CBN sold N1.06 trillion in bills to manage liquidity in the financial system, with stop rates as high as 21.5 percent.

Meanwhile, the naira exchange rate experienced slight fluctuations on both the official NAFEM window and the parallel market.

The revocation of licenses of 4,173 BDCs by the CBN highlights the importance of adhering to regulatory guidelines and the potential consequences of non-compliance.

As Nigeria continues to attract foreign portfolio inflows and work towards managing inflation and liquidity, the revised regulatory and supervisory guidelines for BDC operations will play a crucial role in maintaining the integrity of the financial system.