ABCON says CBN July 31 deadline on recapitalisation not feasible

The Association of Bureau De Change Operators of Nigeria (ABCON) said on Monday in Lagos that the July 31 deadline for its members to shore up their capital base was not feasible. The association’s President, Alhaji Aminu Gwadabe, in a statement appealed to the Central Bank of Nigeria (CBN) to extend the deadline by at least 12 months.

The statement said that such an extension had been a tradition by CBN in any recapitalisation exercise. Besides, the association urged the CBN to reduce the new minimum capital base for the sub-sector to N15 million from N35 million. “The deadline for compliance should not be less than one year as it is the tradition of the CBN in any recapitalisation exercise.

“We also recommend that the mandatory caution deposit should be eliminated as there is no justification for such. BDCs are not deposit taking organisations; we operate on cash and carry basis. We pay for CBN dollars two days in advance. So there is no need for such deposits,” the statement quoted Gwadabe as saying.

It said that if CBN left the mandatory caution deposit at N35 million, it would force many of the BDC operators into liquidation. The statement said the new requirements for BDC operations could empower few operators in the sub-sector, adding that ABCON also rejected the decision of the apex bank to limit the weekly dollar sale to BDCs.

It said that the association appreciated the recent amendments on the requirement and other achievable reforms in the sub-sector. The state statement, however, said the amendments fell short of the association’s recommendations made during a meeting with the CBN Governor with its executive council on July 1. The CBN extended the deadline to July 31 from July 15 within which BDC operators must comply.