Business

Forex crisis: BDCs asks CBN for autonomy to go digital

Published

3 months ago

September 10, 2023

The Association of Bureau De Change Operators of Nigeria (ABCON) has called on the Central Bank of Nigeria (CBN) to give autonomy to BDCs autonomy to go digital.

This is in line with the CBN’s tech reforms for BDCs for rate convergence and ABCON’s various digitization reforms for Bureau de Change operators from 2016 to date.

This disclosure is contained in a statement issued by ABCON and seen by Nairametrics, where it noted that the exchange rate volatility has continued to give rise to the slow economic growth of Nigeria recently.

ABCON called on the CBN to diversify the scope of operation and business model of the BDC operators from a base to less cash and digital platforms.

BDC autonomy

ABCON in the statement said,

‘’There is no doubt that exchange rate volatility has continued to underpin the slow economic growth of Nigeria in the past years.
As a proactive Organisation and an umbrella body of central bank licensed BDCs and In Line with the recent CBN plan reforms on BDCs to be tech savvy and Abcon’s BDCs’ various digitization reforms since 2016 to date, we urge the CBN to democratise and centralise the BDCs operational mechanism by allowing BDCs the autonomy to go digital.
‘’Given the above we called on the CBN to diversify our scope of operation and business model from cash base to less cash and digital platforms.
‘’ABCON in the launch of its vision for BDCs digitization through their exchange rate platform (nsijabdcs.com)unveiling in 2018 have long prepared their members to embrace technology.
‘’It is also important to note that Abcon has spent several million in IT research and developments, designs, and implementations of various layers of automation of the business transformation process from manual to digital.
‘’Our members have through automation now have transactions monitoring systems with installed IT office equipment and internet in their location.
‘’Our members now record their transactions on AWS I cloud in real-time online and extract their daily reports for return rendition all line real-time interface with the CBN.
Our members have also sometimes in 2019 integrated with NIBSS client’s BVN verification and validation platform in carrying out their transactions with their members.’’

Collaboration with NFIU

It added,

‘’The BDCs through the collaborations of Abcon and NFIU registered on the GoAML platforms and Nil-returns platform for the rendition of their suspicious and cash transactions threshold to the NFIU in compliance with their AML/CFT obligations.
‘’We also have to ensure that each of us executes compliance undertaking and appointment of a Compliance officer. ABCON also constantly trains. retrains, sensitizes its members with regulators and security agencies as resource persons.
ABCON as a custodian of regulation and self-regulatory organization believed that the BDCs posed the most effective, transparent pass-through effect and transmission mechanism of the apex bank foreign exchange policies. We achieved convergence in 2006, 2009 and 2018 to 2020 before the outbreak of COVID-19 in 2020.
‘’It is in light of the above that we are calling on the apex bank to grant a no objection approval on our various correspondences to the apex bank to grant the sub-sector the autonomy to embrace digital payment to the sub-sector to achieve rate convergence.’’

Benefits of the autonomy

ABCON listed the benefits of granting the autonomy to include, ‘’First it will lead to a true market rate discovery.

‘’Secondly, it will enhance the achievement of the federal Government’s harmonized foreign exchange rate policies.
‘’Thirdly, will make the BDC transactions monitoring system effective and conforming with their compliance obligation to statutory and regulatory requirements.
‘’Fourthly, it will harmonize and centralize the market and thus make the BDCs the moderating and correcting mechanism for the market. In the same vein, it will create additional employment for the over 40,000 employees direct and indirect in the BDC sub-sector.
‘’Finally, it will usher in Transparency, accountability and ease of supervision.’’