"Six Six Six BDC LTD", "Home Alone BDC LTD", Other Weird Names of BDC Operators Approved by CBN
- The CBN's decision to resume the sale of dollars to BDCs has led to the scrutiny of the names of some of the operators
- While some names have been quite weird, others have been very hilarious, leaving many wondering how they came about
- Names like "Lovers BDC Ltd", "Rice and Beans BDC LTD", "Home Alone BDC Ltd" and many others have sparked serious laughter
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.
The Central Bank of Nigeria has made headlines with its recent decision to recommence the distribution of foreign exchange, allotting $20,000 to every qualifying Bureau De Change (BDC) operator nationwide.
This decision follows a hiatus of three years since the apex bank initially halted foreign exchange transactions with BDC operators.
Yet, an examination of the CBN data reveals a peculiar trend in the names associated with several BDCs, suggesting potential irregularities in their representations.
Source: UGC
CBN resumes sale of dollars to BDCs
On July 27, 2021, the CBN ceased the provision of foreign exchange to BDC operators, alleging their involvement in wholesale FX transactions exceeding USD 5000, violating both their licenses and Nigeria's FX regulations.
Former CBN governor Godwin Emefiele asserted that BDCs had strayed from their intended purpose, instead becoming conduits for corruption within the country.
The most recent circular permitting the sale of forex to BDC operators was titled "Sale of Foreign Exchange to Bureau de Change Operators to Meet Retail Demand for Eligible Invisible Transactions."
It aimed to address ongoing distortions in Nigeria's retail forex market segment and narrow the widening exchange rate gap.
The allocation was set at a rate of N1,301/$, reflecting the lower band rate of spot transactions executed at the Nigerian Autonomous Foreign Exchange Market as of the preceding trading day, February 27, 2024.
Unusual names of BDCs
Godwin Emefiele had highlighted findings indicating that several BDCs were owned by the same promoters, enabling them to acquire multiple FX from the regulator.
He emphasized that such violations had contributed to the gradual dollarization of the Nigerian economy, resulting in adverse effects on monetary policy implementation.
At the inception of BDC sales in 2006, Nigeria had fewer than 100 operational BDCs with weekly sales of less than $30 million, leading to a convergence of BDC rates with the official rate.
Presently, CBN data indicates that the number of BDCs has surged to 5,690.
A scrutiny of this total reveals numerous entities with unconventional names.
Below are examples of some of these atypical names among approved BDC operators in Nigeria:
- CCTV BDC LTD
- Chelsea BDC LTD
- Couple BDC LTD
- Cream BDC LTD
- Cruising BDC LTD
- Day-by-day BDC LTD
- Deadlist BDC LTD
- Deep Freezer BDC LTD
- Four to five BDC LTD
- Fullmoon BDC LTD
- Go-well BDC LTD
- Gucci BDC LTD
- Happy Ends LTD
- Home Alone BDC LTD
- In-to-in BDC LTD
- Looking and Seeing BDC LTD
- Lovers BDC LTD
- Pros and Cons BDC LTD
- Rice and Beans BDC LTD
- Set up BDC LTD
- SIX Six Six BDC LTD
- Slow Down BDC LTD
- You and Me BDC LTD
- Young Free & Single BDC LTD
- Zero to Ten BDC LTD
Speaking on the matter, Theophilus Ugba, operations manager with one of the tier-2 banks, told Legit.ng that the CBN must re-evaluate every one of the approved BDC operators.
He said:
"When you look at some of those names on the list, you can't help but wonder if these companies are actually registered. If truly they are, what would have necessitated such odd names?
"That being said, now that the CBN has announced plans to resume the sale of dollars to BDCs, there's a need for the apex bank to check the veracity of these BDCs.
"The CBN must not let these dollars continue going into the hands of people who would deviate from the objective and use the dollars to perpetrate corruption.
CBN imposes new capital requirements on BDCs
In related news, Legit.ng reported that the CBN has put forward new regulations aimed at raising the minimum requirements for BDC operators in Nigeria to N2 billion and N500 million for Tier 1 and Tier 2 licenses, respectively.
This marks a significant departure from the previous standard of N35 million for a general license.
These proposed changes are outlined in the Exposure Draft within the Revised Regulatory Supervisory Guidelines for Bureau De Change operations in Nigeria.
As per the updated regulations released by the apex bank, once approved, the guidelines will be implemented on a date determined by the CBN.
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Source: Legit.ng
