CBN Directs Banks To Set Up Teller Points For Forex

CBN Directs Banks To Set Up Teller Points For Forex
  • Begins refund of capital deposits, license fee to BDCS
  • Disburses N756.5bn loan to 3.7m farmers

Mariam Sanni

The Central Bank of Nigeria (CBN) has directed Deposit Money Banks (DMBs) to set up teller points in designated branches for the sale of Foreign Exchange (forex) to Nigerians.

The directive was sequel to CBN’s decision to discontinue sale of forex to Nigerians through Bureaux de Change operators.

The directive was contained in a letter to the DMBs by Haruna Mustafa, Director, Bank Supervision Department of the apex bank, on Thursday in Abuja.

“Further to the Monetary Policy Committee briefing of July 27, all DMBs are hereby reminded to set up teller points at designated branches across the country.

“This is to fulfil legitimate FX requests for Personal Travel Allowance, Business Travel Allowance, tuition fees, medical payments and SMEs transactions, among others.

In this regard, DMBs are also required to adequately publicize the locations of the designated branches and make necessary arrangements to sell FX to customers in cash and/or electronically in compliance with extant regulations,” he said.

Mustafa further advised DMBs to ensure that no customer was turned back or refused FX provided that documentation and all other requirements are satisfied.

“Equally, undue delays, rationing and/or diversion of FX is strongly discouraged whilst DMBs are required to establish electronic application and alert systems to update customers on status of their FX requests,” he added.

The CBN also pledged to closely monitor banks’ conduct and compliance with the directive in order to ensure an efficient FX market for all legitimate users.

Also last week Apex Bank announced it will commence immediate refund of minimum capital deposits and licensing fees to Bureaux de change (BDCs) promoters with pending applications.

CBN disclosed this in a circular to BDCs and all Deposit Money Banks published on its website on Thursday, July 28, 2021.

The move follows CBN decision to discontinue selling forex to BDCs and also suspend issuing new licences.

AljazirahNigeria understands that to become a BDC operator the requirements include a minimum capital requirement of N35 million for operators; a mandatory cautionary deposit of N35 million; an application fee of N100,000; licensing fee of N1 million and annual license renewal fee of N250,000.

The circular signed by Ibrahim S. Tukar Director, Financial and Regulation Department of CBN instructed deposit banks to stop accepting instructions from customers to transfer capital deposits of N35 million to the designated CBN account for the purpose of applying for BDC Incense.

The statement partly reads: CBN advises BDC promoters where applicable to forward their request for the refund in writing to the director, financial policy and regulation department, Central Bank of Nigeria, Abuja.

“The request should be accompanied with account details for the refund which should be the same as the account from which the deposit originated.

Also, CBN wants a copy of the bank draft/telex for payment of licensing fee of N1 million if any.

Recall that last Tuesday, CBN governor Godwin Emefiele had described the activities of the BDCs as promoting fraudulent activities and bringing pain to Nigeria.

He said, “BDCs have abandoned the original objective of their establishment, which was to serve retail end-users who need US$5,000 or less to help maintain price stability in the market since the CBN had been selling forex to them. Instead, they have become wholesale dealers in foreign exchange.

“They have remained renegade and so greedy, recalcitrant with abnormally high profit from these sales while ordinary Nigerians have been left to feel the pain and therefore suffer.

“Given this rent-seeking behavior, it is not surprising that since the CBN began to sell forex to the BDCs, the number of operators has risen from a mere 74 in 2005 to over 2,700 in 2016, and almost 5,500 BDCs as of today.

“Additionally, the CBN gets no less than 500 new applications from BDC licences every month, and we begin to question, what is in this industry that everyone must be in?” he had queried.

Meanwhile, the Central Bank of Nigeria has disclosed that it has disbursed a total of N756.51bn to over 3.7 million farmers under the Anchor Borrower’s Programme since the inception of the initiative in 2015.

The apex bank revealed this in its communiqué no. 137 of the Monetary Policy Committee meeting released in Abuja.

President Muhammadu Buhari had in 2015 launched the ABP in a bid to boost agricultural production and reverse Nigeria’s negative balance of payments on food.

Beneficiaries of this programme include farmers cultivating cereals (rice, maize, wheat etc.) cotton, roots and tubers, sugarcane, tree crops, legumes, tomato and livestock.

Loans are disbursed to the beneficiary farmers through deposit money banks, development finance institutions and microfinance banks, which the programme recognises as participating financial institutions.

The communiqué read, “Under the bank’s development finance initiatives, the bank granted N756.51bn to 3,734,938 smallholder farmers cultivating 4.6 million hectares of land, of which N120.24bn was extended for the 2021 wet season to 627,051 farmers for 847,484 hectares of land, under the Anchor Borrowers’ Programme.

The CBN also stated that so far, the sum of N121.57bn has been disbursed to 32,617 beneficiaries under its Agribusiness, Small and Medium Enterprise Investment Scheme, an initiative introduced in February 2017 by the MPC.

It added that as of May 2021, about 109,879 SMEs had benefited from its Targeted Credit Facility and National Youth Investment Fund schemes.

The communiqué read, “For the Targeted Credit Facility, N318.17bn was released to 679,422 beneficiaries, comprising 572,189 households and 107,233 Small and Medium Scale Enterprises.

“Under the National Youth Investment Fund, the bank released N3bn to 7,057 beneficiaries, of which 4,411 were individuals and 2,646 SMEs.”

Other sectors that have benefited from the bank’s facilities and initiatives include health, information and communication technology and film.

It said that under the Creative Industry Financing Initiative, N3.22bn was disbursed to firms classified as confidential beneficiaries across movie production, movie distribution, software development, fashion, and IT verticals.

“Under the N1tn Real Sector Facility, the bank released N923.41bn to 251 real sector projects, of which 87 were in light manufacturing, 40 in agro-based industry, 32 in services and 11 in mining.

“On the N100bn Healthcare Sector Intervention Facility, N98.41bn was disbursed for 103 health care projects, of which, 26 are pharmaceuticals and 77 are in the hospital services.”

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