Following an examination on the activities of Bureaux De Change (BDC) operators in the country, the Central of Nigeria (CBN) has meted out various degrees of sanction on 37 firms in the sub-sector over market infractions that were identified in their operations.
THISDAY learnt that the disciplinary action, which was approved by the CBN Governor, was the outcome of a spot check that was carried out on a total of 51 BDC firms in both Lagos and Abuja in September last year.
In fact, THISDAY findings revealed that while the apex bank placed five BDC firms on indefinite suspension, 24 of the affected BDCs on one month suspension (13 located in Abuja and 11 located in Lagos); eight were suspended for three months.
THISDAY gathered that some of the reasons for the punitive action were that the firms did not have basic anti-money laundering procedure; they effected change of ownership in their institutions without the CBN approval; they sold forex beyond the authorised limits to individuals; some of them had relocated without informing the CBN; and that they sold forex without adequate documentation.
A letter signed by Mr. A.A. Bedu, on behalf of the Director, Other Financial Institutions Supervision Department of the CBN, titled: ‘Re: Spot Check on Bureaux De Change,’ addressed to the managing director of one of the affected firms (name withheld), a copy of which was obtained by THISDAY, confirmed the development.
The letter dated February 17, with reference number: “OFI/GPC/GEN/BDC/02/383,” said: “We refer to the spot check conducted on your BDC in September 2011, as apart of the clean-up and sanitisation of the forex market.
“The report of the spot check revealed that you committed the following infractions: incomplete and inaccurate returns rendition to financial policy and regulation department of the CBN.
“Customers’ passports were not stamped with the amount of foreign currency sold to them and interlocking directorship/common ownership of two BDCs. We therefore convey management approval for the suspension of your institution indefinitely from accessing the CBN forex window,” the letter stated.
But Head of Corporate Communications of the CBN, Mr. Muhammed Abdullahi, further confirmed the development in a text message at the weekend.
“Yes it is true that the BDCs were sanctioned for various offences ranging from non submission of returns, non display of rates, among others. The sanction ranges from one, two, three months, or indefinite suspension, based on the gravity of the offence,” Abdullahi said.
Although THISDAY could not ascertain the names of all the firms that were affected, findings showed that some of them included Legacy Bureau De Change Limited, Lagos, Wordlink Bureau De Change and Xperts Bureau De Change.
A reliable industry source who pleaded to remain anonymous, informed THISDAY that the spot check is going to be a continuous exercise, adding that the regulator was desirous of sanitising the forex market so as to avoid malpractices in the system.
“The objective is to sanitise the market of quacks and also make those that have not been doing things the right way to sit up. We expert this to positively affect the naira,” he added.