Bureau de Change operators seek CBN approval for mergers to create new N350m capital base

The Association of Bureau de Change operators of Nigeria does not want the industry to be recapitalized; rather, it wants numerous bureau de change operators to consolidate.

This is coming after a report that ABCON is trying to get its members to enter into mergers.

The association had earlier called on the Central Bank of Nigeria (CBN) to license operators' digital autonomy.

The recent recommendation, according to report was intended to significantly improve ABCON's corporate governance and norms of interaction with the apex bank, the organization's president, Alhaji Aminu Gwadabe, stated in a statement on Thursday.

Class 'A' BDCs were given the option to merge in 2007/2008, giving them access to a weekly allocation of $1 million and a capital base of N500 million.

Instead of a complete examination of each operator's capital base, the group advocated for similar business models through mergers and consolidation.

According to the group, each of the BDCs with CBN licences had capital of N35m and should be permitted to voluntarily consolidate among themselves.

Gwadabe stressed that the group never demanded an increase in the statutory regulatory-approved capital base of N35 million for each BDC. Rather, he said a merger of at least ten BDCs to create new capital of N350 million was sought.

He said that the action will lessen regulatory demands and expand the operation's scope and source diversification through several windows.

He asserted that the consolidation of many BDCs into a single, stronger organisation will position them for a greater role in the financial system.

This he added includes the management of diaspora remittances or other offshore monies drawn into the country's economy to expand access to foreign exchange for consumers.

Gwadabe claimed that the consolidation effort by the apex bank in 2004 that resulted in the merger of several commercial banks is a model that the apex bank might use for the BDCs.

He added that this will help to reduce their size and present an easily manageable operator for maximum influence in the foreign exchange market.

According to him, ABCON denies media reports that call for the recapitalization of BDCs.

He claimed that the association had been quoted by the media out of context, thus the organisation is striving to develop accurate accounts.

He claimed that the BDCs were looking for various industry mergers to minimise the number of players and allow for more effective regulation.