Pursuant to earlier articles published on Bureaux De Change in Nigeria, this particular article will be looking at the most relevant regulatory operational requirements provided by the Central Bank of Nigeria Guidelines For Bureaux De Change in Nigeria.

These regulatory provisions will be focused on the topics of :-

– Management staff requirements.

– Disqualification of certain individuals from BDC management in Nigeria.

– Operations.

– Revocation of BDC licenses.

– Effecting additions or changes in BDC management or the board of directors of a BDC in Nigeria.

What are the provisions of the CBN Guidelines on BDC management?

The guidelines provide that a managing director of a Bureau De Change must have at least 3 years postgraduate experience while other BDC management staff must have at least 2 years postgraduate experience.

The compliance officer of a BDC must be selected from among its management staff.

What are the grounds for the disqualification of certain individuals from BDC management in Nigeria?

All the stipulated conditions for the exclusion of certain individuals from the management of banks as stated in the Banks and Other Financial Institutions Act (BOFIA) shall apply to the management of BDCs except with the written permission of the CBN Governor.

However, a BDC director whose license is revoked as a result of the breach of any condition upon which the license was granted shall not be eligible to apply for a BDC license as well.

What are the provisions of the CBN Guidelines on the operations of BDCs in Nigeria?

A customer of a BDC wishing to sell foreign exchange above $10,000 or its equivalent shall be required to disclose his source of the foreign exchange.

Maximum values for each Personal Travel Allowance and Business Travel Allowance are not to exceed $4,000 and $5,000 respectively.

Also, purchases of foreign exchange by intending travelers shall be supported by their Bank Verification Numbers (BVNs) as well as validly issued and genuine travelling documents (tickets, passports and visas) along with a signed sales receipt.

Are BDCs required to keep documents obtained from customers in support of transactions?

Yes, a BDC is required to keep its copies of documents obtained from customers for a period of at least 6 years after the severance of relations with the customer or completion of the transaction.

What are the grounds for the revocation of a BDC license?

The grounds for revoking a BDC license include :-

– Multiple BDC ownerships.

– Obtaining foreign exchange from ineligible sources.

– Street trading of foreign exchange.

– National interest (public policy) considerations.

Setting up a Corporate Trustee Company in Nigeria

A Corporate Trustee can be defined as a company licensed to render fiduciary services to companies and corporate customers in respect of debt capital & loan trust assets as well as Collective Investment scheme management and remedial services.

This article will be looking mainly at the topics of how Corporate Trustees are regulated as well as the licensing requirements for corporate trustees in Nigeria.

What constitutes the major Regulatory Framework governing Corporate Trustees in Nigeria?

Corporate Trustees in Nigeria are licensed by the Securities and Exchange Commission SEC through the SEC rules 2013.

What is the required minimum share capital for Corporate Trustees in Nigeria?

Corporate Trustees are required to have a minimum share capital of 300 Million Naira.

What is the minimum required number of directors for Corporate Trustees in Nigeria?

There is no limitation on the number of directors for a Corporate Trustee, but a Corporate Trustee must have at least 3 sponsored individuals, one of whom must be a designated compliance officer and the other must be the managing director of the trustee.

What are the requirements for licensing of Corporate trustees in Nigeria?

The requirements for the licensing of corporate trustees in Nigeria by SEC include the following :-

– A paid application fee of 50 Thousand Naira.

– A paid processing fee of 200 Thousand Naira.

– Evidence of payment of a processing fee of 500 Thousand Naira.

– A duly executed Form SEC 4A for the company.

– Form SEC 2 & 2D for each of the 3 sponsored individuals of the Corporate Trustee. One of these individuals must be a lawyer experienced in trusteeship practice.

– A completed Form SEC 2 & 2D for the directors of the company

– Proof of the minimum share capital of 300 Million Naira in cash, fixed assets or quoted security investments.

– A current fidelity insurance bond covering at least 10% of the minimum paid-up capital as stipulated by the SEC rules and regulations.

– A profile of the company including its brief history, organizational and shareholding structure, principal officers as well as details of its past and current activities.

– A 6 month bank account statement of the company.

– Police clearance reports for each sponsored individual with each sponsored individual required to report at the SEC head office in Abuja or Lagos zonal office with 2 recent passport photographs.

– A copy of a valid means of identification of  each of the directors and sponsored individuals of the company.

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The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, said on Friday that the February 10 deadline for the old and new naira notes swap will not be extended.

Emefiele disclosed this during a special briefing at the CBN office in Lagos. He said that the apex bank is working with other stakeholders to mitigate pressures undermining successful implementation of the policy.

“I would say no. I am sure that people are going to say only last week I said no, but I want to say unfortunately again, this time we will not be looking at extension of deadline because we as the central bank, deposit money banks and other important stakeholders, we are looking at areas where there is pressure and we are doing everything possible to address those areas of pressure.

“We have had cases where some bank branches have some cash in their vaults and because there was no demand for them and we asked central bank officials when reported to move those monies away and move them to areas where there is pressure. So those are some of the logistical challenges that we faced and we are doing everything possible to address them. So I am not going to make any promise to anyone that there would be any further extension of this deadline,” Emefiele said.

Emefiele reiterated the CBN’s position following a visit by APC governors to President Muhammadu Buhari on Friday, in an effort to convince them to discontinue the currency swap exercise. He said the central bank is aware of the pains Nigerians are facing to access the new naira notes.

As an alternative, the CBN governor said the currency swap exercise will be extended to microfinance banks, and the apex bank will engage the services of 30,000 super agents in the hinterlands as part of new measures to accelerate the circulation of new naira notes. He added that the central bank is in talks with banks to make easily accessible alternative channels available to the public.

As part of the CBN’s efforts to ensure sufficient circulation of the new naira notes, Emefiele has asked Point of Sales (PoS) agents to stop exorbitant charges on transactions as access to the new naira notes via ATMs tightens.

”I am going to be calling a meeting with the banks this evening or by tomorrow, if those charges go to or those charges have been charged through the bank, we are going to have an arrangement with even telcos to see how those charges can actually at this time be stopped.

“Those charges at this time should be stopped. So, if we know whatever you are making that you’re not making because we stopped it, we can collect it somewhere and look for a way to pay you.

“But we don’t want you to continue to create pain on those who want to use alternative channels when they cannot have cash in their pocket.

“We will go into this later this night or even tomorrow, we’re going to call a meeting of both the banks and the mobile networks; at this time nobody should be charged, if you are charged, we will need to know about it.

“But we would want this service to continue to be offered. Whatever it is in terms of volume and number that you have carried out. We will look for a way to pay you your money,” he said.

Experts have called on the CBN to suspend charges on all banks’ electronic transactions, as cash becomes limited in the face of the naira swap exercise, forcing individuals and businesses to rely on bank transfers and PoS services as alternatives.

Buhari had on Friday, told the APC governors that his government is doing everything to address the policy implementation hindrances, questioning banks’ commitment to its success.

He’d asked the Progressive Governors Forum (PGF) to give him seven days to provide an answer to their request.

“I am aware of the cash shortages and hardship being faced by people and businesses, on account of the Naira redesign. I want to assure you that we are doing everything to resolve these issues. Nigerians should expect significant improvements between now and the February 10 deadline.

“I met with a delegation of Governors today, on the matter. All the complaints about the execution of the currency change are being seriously looked into. I will ensure that everything is resolved in a lasting manner, and we will all enjoy the long-term benefits of the decision,” he said.

I am a teacher and teachers receive most of their rewards in the high heavens, only jara are paid here in the gravity-heavy earth. But I want to ask Nigerian banks to open a donor account, I am open to support with N1,000, to help fix whatever they need to fix to get banking services back.

What happened in the last 4 days is unprecedented in our business – payments are failing, salaries of workers are failing, and as I write, reconciliations are convoluted. The fintechs are showing “successful” but banks are not crediting or debiting as expected.

Fellow citizens, moments like this remind everyone that banking is the operating system of any economy. What we have experienced in the last few days has not happened for a long time. And this failure must end. This requires a senate-level investigation to check if someone is after the destruction of Nigeria.

To cap this, it came on the weekend before the start of our program. Just at the wrong time. Good People, keep trying, we understand the challenges. But we need to tell banks to step up and stop paying dividends, and invest in their technologies if that is the problem.

Pure and simple, banking must WORK in Nigeria and these failures must stop. These failures can destroy our economy if they continue.

Comment on Feed

Comment: Too much for the “cashless economy” mantra.

My Response: For cashless to work, the system must be seamless. The issue here is that reversals are happening. Payments are failing. Everything is broken.

Comment 2: I wrote against the timing and the very poor planning and execution of the cashless policy but many were merely focusing on the over-hyped vote buying prevention benefits.

The selfish Nigerian elites merely designed the policy from its myopic perspective without any consideration for the masses that operate outside our formal sectors.

It bears repetition that the majority of Nigerians are illiterates, live in the rural areas, have no bank account, have no access to electricity and have no access to the internet. You are free to believe anything to the contrary to your loss.

Unfortunately, the minority but loud, literate Nigerians residing in the major urban areas dominate the corridors of power, dominate every discourse and call the shorts from their vantaged positions.

The second truth is that our so-called cashless options function in fits and somehow unreliable, even at the best of times.

Now CBN has gleefully mopped the old notes from the economy, proved incapable of or unwilling to replacing the mopped notes with new ones and the entire cashless architecture is unravelling with our eyes wide open.

The yearning question is, what’s the game plan of the powers that be in the land and the orchestrator of the prevailing madness?

Comment 3: Ndubuisi Ekekwe the systems of commercial banks are failing because the number of transactions have increased drastically due to cash shortage and their poorly designed systems are not scalable. The systems of fintech companies are better designed than most banks applications. The major reason for this is because banks are very terrible when it comes to treating their engineers well in terms of pay, welfare and some very dirty office politics.

Even before the spike in transactions, a lot of them are already struggling due to the high exit rate of
their experienced engineers. Most of them left for other companies that have a better pay and a good work environment.

Banks like GTB, Zenith and now Access are now performing poorly interms of digital banking while Fintech companies like TeamApt, Opay, Palmpay, Flutterwave, Paystack and Interswitch are growing stronger and building a more reliable and scalable systems.

Have you noticed how almost all the POS machines that are owned by commercial banks are going into extinction due to poor service?

Well, if I may ask you, why do you want to donate money to people that are making billions of Naira annually as profit ? Pleaee donate the money to the poor.

Comment 4: There is capacity deficit across board, but when you are never tested to the limits, you keep deluding yourself that you have a robust infrastructure that won’t crack under massive stress. Wait till February 25, if just 50 million Nigerians step forward to vote, INEC system will collapse. INEC hasn’t conducted an election where 50 million people participated before, so what happens if we witness such numbers this month? Expect a total chaos.

We don’t test our capabilities enough in this country, and that is why we keep believing that we are doing great, until a small challenge shows up.

We will be all right, only that we don’t learn enough.