Connect with us


CBN forex ban to BDCs will check round-tripping – experts



Naira exchanges at N359.4 to dollar at parallel market

Financial experts say the Central Bank of Nigeria (CBN) ban of foreign exchange sales to Bureau De Change (BDC) operators will check round-tripping.

They said this in a separate interview with our reporter in Lagos on Friday, while reacting to the outcome of the July Monetary Policy Committee (MPC) meeting.

They said the apex bank decision was quite assertive and would reduce the incessant foreign exchange abuse in the country.

Mazi Okechukwu Unegbu, former President, Chartered Institute of Bankers of Nigeria (CIBN), said the apex bank foreign exchange restriction to BDC operators should be lauded.

“The decision to withhold foreign exchange to the BDCs is a good one, so as to stop further abuse.

“The BDCs in our country have become conduits for laundering money in recent times which is certainly a drawback to the economy,” Unegbu said.

He noted that no monetary authorities would tolerate the racketeering that occurs in the BDCs and would not effect a change.

Unegbu added that authorising commercial banks to sell foreign exchange was profound because they were more reliable and easier to manage.

“Unlike the BDC operators who are not structured like banks, their population has grown exponentially to over 4,000.

“The large population makes its quite challenging to manage and track nefarious members, which justifies its outright ban,” he said.

Also speaking, President Progressive Shareholders Association of Nigeria, Mr Boniface Okezie, said the apex bank’s action of withholding foreign exchange to the BDCs was laudable.

Okezie, however, said that the apex bank would have punished erring operators instead of a total ban.

“Although it will have been better if the CBN punishes some of the guilty BDC operators rather than total discontinuation of dollar sales to them.

He noted that some of the BDC operators were quite honest and keep to the roles of the regulator while engaging in their businesses.

It was reported that the CBN Governor, Mr Godwin Emefiele, said the BDC operators had abandoned the objectives of their establishment, which is to serve the retail end-users who needed 5,000 dollars or less.

Emefiele said they had become wholesale dealers and illegally transacted FX to the tune of millions of dollars per transaction.

The CBN said that given the rent-seeking behaviour of the BDCs, the MPC decided with immediate effect to discontinue the sale of FX to the BDCs and allow the CBN to no longer process or issue new licences for BDC operations in the country.

The members voted to channel significant portion of weekly allocations of BDC allocations to the commercial banks to meet legitimate FX demands.

They also instructed all commercial banks in the country to create a dedicated teller point in designated branches for the sale of FX for legitimate transactions.

Simon Akoje

NEWSVERGE, published by The Verge Communications is an online community of international news portal and social advocates dedicated to bringing you commentaries, features, news reports from a Nigerian-African perspective. A unique organization, founded in the spirit of Article 19 of the Universal Declaration of Human Rights, comprising of ordinary people with an overriding commitment to seeking the truth and publishing it without fear or favour. The Verge Communications is fully registered with the Corporate Affairs Commission of the Federal Republic of Nigeria as a corporate organization.



Shell Digital Plan RESPONSIVE600x750
Shell Digital Plan RESPONSIVE600x750