…asks CBN to Publish Beneficial Owners of Licensed BDC
Amidst free fall of the naira which saw the Central Bank of Nigeria (CBN) issuing incessant regulations to mitigate the lingering forex crisis, the recent being a circular directing the “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks,” the Center for Fiscal Transparency and Integrity Watch calls on the Apex bank to, in addition, spotlight the operations of Bureau De Change (BDC) in the country, particularly requesting the publication of the Beneficial Owners of all licensed BDCs .
This, we strongly believe, is necessary, given the opacity that surrounds the operations of BDC, lending credence to the speculation about potential for exploitation and manipulation within the Bureau De Change (BDC) sector which continue to weaken the naira in the free market.
Currently, there are no adequate data on the operations of the BDC to understand trends and how they affect the foreign exchange market; and the discrepancies between BDC buying and selling rates also raises questions about fair pricing practices and the potential for exploitative arbitrage.
Additionally, it’s unclear if BDCs operators comply with Anti-Money Laundering (AML) regulations as provided for in the Money Laundering (Prohibition) Act 2022, which mandates robust Know Your Customer (KYC) and Customer Due Diligence (CDD) procedures for BDCs. Concerns exist that some operators may not be fully compliant, creating vulnerabilities to money laundering, market manipulations and other financial crimes.
It’s on this note that we demand the public reporting of all licensed BDC transactions, including volumes, buying and selling rates. This will promote market transparency to address arbitrage trading. We equally call on the CBN to strengthen monitoring and enforcement of AML regulations by conducting a thorough audits and inspections of BDC operators to ensure adherence to KYC and CDD requirements; and impose swift and severe penalties for non-compliance.
We believe that these measures will fosters trust and confidence in the market, strengthen the naira, attract foreign investment and, overall, may reveal that the forex crisis may not be driven by genuine demand such as importation and foreign transactions but by other pecuniary motives.