Economy

CBN restricts Dollar from BDC to $10k for school fees, $5k for medicare

Published

11 months ago

February 27, 2024

The Central Bank of Nigeria has placed limits on the foreign exchange sales by Bureau De Change (BDC) operators in a new document titled: “Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria”.

The circular with Ref: FPR/DIR/PUB/CIR/002/006 dated February 23, 2024 and titled: “Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria – Exposure Draft,” was signed by the Director, Financial Policy and Regulation Department, Mr Haruna B. Mustafa.

In the reversed regulatory guidelines, CBN stated that BDCs may sell foreign currency in the equivalent of $4,000 and $5,000 for personal travel allowance (PTA) or business travel allowance (BTA), respectively, to an individual once every six months.

According to the Bankers’ bank the sale of foreign currencies to the intending travellers would have to be accompanied with their bank verification number (BVN) or tax identification number (TIN), duly completed e-form, valid international passport, valid visa, as well as valid international return ticket.

In addition, for BTA, the apex bank said letter of request from the corporate body stating the purpose of the visit addressed to the processing BDC, as well as certificate of the business registration or incorporation, must be submitted by customers.

Also, the CBN mandated that letter of invitation from the customer’s overseas business partner and tax clearance certificate, be presented by the customers.

“The amount of foreign currency sold and date of sale shall be endorsed on the passport. A photocopy of the documents, forex endorsement page and sales receipt shall be filed in a sequential order by the BDC,” CBN said.

CBN also said BDCs may sell foreign currency up to the equivalent of $5,000 to a customer for medical bills once a year.

Such bill, CBN said, shall be transferred from the BDC’s domiciliary account with a Nigerian bank.

“It shall be paid directly to the hospital and supported by valid visa, duly completed e-Form A, letter of reference from a specialist doctor, or a specialist hospital in Nigeria, and valid international passport,” the apex bank said.

Other necessary documents listed by the financial regulator include valid air ticket, and letter issued by the overseas specialist doctor stating the cost of treatment.

According to the apex bank, BDCs may sell foreign currency up to the equivalent of $10,000 to a customer for school fees once a year.

“Such fee, which shall be transferred from the BDC’s domiciliary account with a Nigerian bank, shall be paid directly to the school and supported by the following documents: duly completed e-Form A, evidence of admission/course programme, valid air ticket, and letter issued by the overseas specialist doctor stating the cost of treatment, and school bill/invoice,” CBN said.

“For post-graduate studies, photocopy of first degree certificate or its equivalent/certified true copy of statement of result by the awarding institution.

“The CBN may review the amounts and frequencies for sale of foreign exchange from time to time.”

A beneficiary of foreign currency sale may receive up to 25 percent of the foreign currency in cash, according to the CBN, and the remaining 75 percent shall be transferred to the customer electronically (to the customer’s Nigerian domiciliary account or prepaid travel card).

CBN, However, noted that the guidelines significantly enhances the regulatory framework for the operations of Bureau De Change as part of ongoing reforms of the Nigerian foreign exchange market.

The letter partly read: “Pursuant to the powers conferred under Section 56 of the Banks and Other Financial Institutions Act, 2020 (BOFIA), the Central Bank of Nigeria (CBN) hereby issues this draft revised Regulatory and Supervisory Guidelines for Bureau de Change (BDC) Operations in Nigeria for stakeholder comments and/or inputs.

“The Guidelines significantly enhances the regulatory framework for the operations of Bureau De Change as part of ongoing reforms of the Nigerian foreign exchange market. The Guidelines revises the permissible activities, licensing requirements, corporate governance, and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) provisions for BDCs.

“It also sets out new record-keeping and reporting requirements, among others,” the circular indicated. It advised that every comments should be directed to the Director, Financial Policy and Regulation Department Central Bank of Nigeria, Abuja with soft copies mailed to [email protected] by March 4, 2024.

In the draft reversed guidelines, the apex bank stated that “No person shall carry on the business of BDC in Nigeria except with the prior authorization of the CBN.”

It defined a BDC as a company licensed by the CBN to carry on only retail foreign exchange business in Nigeria.

On non-eligible promoters, the CBN listed categories of people and organisations that shall not be allowed to participate in the ownership of BDCs, directly or indirectly among whom are:

“Commercial, merchant, non-interest and payment service banks; Other Financial Institutions (OFIs), including holding companies and payment service providers and Serving staff of financial services regulatory and supervisory agencies.

“Serving staff of regulated financial services providers; Governments at all levels; Public officers as defined in 5th Schedule Part IV of the Constitution of the Federal Republic of Nigeria.

“Non Governmental organizations; Cooperative societies; Charitable organizations; Academic and religious institutions; Non-Nigerian non-resident natural persons; Non-Nigerian resident natural persons and Non-resident non-regulated companies.

“Telecommunication services providers; Sanctioned individuals and entities; A shareholder in another BDC (whether directly or indirectly); Any other entity that the CBN may from time to time designate.”

Under Permissible Activities; the apex bank stated that a BDC may: “Acquire foreign currency from the sources listed in Section 4.0; Sell foreign exchange as detailed in Section 5.0; Open foreign currency and naira accounts with Commercial or Non-Interest Banks (CNIBs); Collaborate with their banks to issue prepaid cards. And Serve as cash-out points for International Money Transfer Operators (IMTOs).”

On the Non-Permissible Activities, the CBN stated that a BDC or its franchisee shall not engage in –

“Street-trading; Maintaining any type of account for any member of the public, including accepting any asset for safe keeping/custody.

“Taking deposits from or granting loans to members of the public in any currency and in any form; International outward transfers; Retail sale of foreign currencies to non-individuals, except for BTA

“Engaging in off-shore business or maintaining foreign correspondent relationship with any foreign establishment. Opening or maintaining any account with any bank or financial institution outside

Nigeria. Acting as custodian of foreign currency on behalf of customers.

“International inward transfers, except for operators that serve as cash-out points for IMTOs. Borrowing sums which in aggregate exceed the equivalent of 30 per cent of its shareholders’ funds unimpaired by losses, in the BDC’s audited financial statements of the preceding year.

“Engaging in forwards, futures, options, or other derivative/speculative transactions. Obtaining foreign exchange from sources other than those listed in Section 4.0. Granting of loans and advances in any currency. Selling foreign exchange on credit to any customer. Engaging in any trade-related import activities.

“Serving as payment or collection agents on behalf of customers. Dealing in gold or other precious metals. Carrying on capital market, insurance and/or pension sector activities. Establishing subsidiaries.

Any foreign exchange transaction that involves illicit financial flows.

“Financing of political activities. All other businesses not expressly permitted by this Guidelines. Any other activity as may from time to time be termed “non-permissible” by the CBN.

On the Sources of Foreign Currencies; the apex bank listed the following as conditions that shall apply for the sourcing of foreign currencies by BDCs:

“i. A BDC may source foreign currency from: a. Tourists. b. Returnees from the diaspora. c. Expatriates with foreign exchange inflows from work, travel, investment or their domiciliary accounts.

“d. Residents with foreign exchange inflows from work, travel, investment or their domiciliary accounts. e. International Money Transfer Operators (IMTOs),

f. Embassies. g. Hotels that are authorised buyers of foreign currencies. h. The Nigerian Foreign Exchange Market (NFEM). i. Any other source that the CBN may specify.”

“ii. Sellers of the equivalent of USD10,000 and above to a BDC are required to declare the source of the foreign exchange and comply with all AML/CFT/CPF regulations and foreign exchange laws and regulations.”

Economy

Nigeria secures aircraft financing deal with Afreximbank

Published

2 days ago

January 16, 2025

Naijablitznews

By Francesca Hangeior

A development financing institution, African Export–Import Bank, Afreximbank, has agreed in principle to collaborate with Nigeria on aircraft financing.

Afreximbank, while announcing plans to launch a leasing subsidiary, which will soon take delivery of 25 aircraft to be leased to African airlines, said it will provide Nigerian airlines with access to dry-leased aircraft that would enable them to better service Bilateral Air Service Agreement, BASA, routes and domestic operations.

A statement by Mr Tunde Moshood, special adviser on Media and Communications to the Minister of Aviation and Aerospace Development, Mr Festus Keyamo, said the partnership was achieved during a side meeting held with the Afreximbank team at the four-day Aviation Economic Conference in Dublin, Republic of Ireland.

The statement reads: “A significant milestone in Nigeria’s aviation sector was achieved during a side meeting held with the Afreximbank team at the ongoing Aviation Economic Conference in Dublin, Republic of Ireland. The meeting, facilitated by Boeing’s Senior Director of Finance, Lereece Rose, brought together key stakeholders to discuss aircraft financing opportunities for Nigerian airlines.

“The meeting was attended by the Minister of Aviation and Aerospace Development, Festus Keyamo SAN, who led the Nigerian delegation. The delegation included distinguished members such as the Chairman, Senate Committee on Aviation, Senator Abdulfatai Buhari; Chairman, House Committee on Aviation, Abdullahi Idris Garba, Chairman, Senate Committee on Banking, Insurance, and Other Financial Institutions, Senator Abiru Adetokunbo; Director General of the NCAA, Capt. Chris Najomo; Managing Director of Fidelity Bank, Dr. Nneka Onyeali-Ikpe; COO of Air Peace, Toyin Olajide; CEO of XEJet, Emmanuel Iza; Chairman, ValueJet, Kunle Soname and his Managing Director, Capt. Majekodunmi, and Chairman/CEO of Bellagio Air, Dr. Oludare Akande, among other aviation stakeholders.

“At the meeting, Afreximbank, led by its Director and Global Head of Project and Asset-Based Finance, Helen Brume, agreed in principle to collaborate with Nigeria on aircraft financing. Highlighting the bank’s extensive experience in supporting airlines such as Arik Air, Kenya Airways, and TAG over the past two decades, Brume emphasized the need for robust aviation infrastructure to enhance the competitiveness of African airlines.

“To address this, Afreximbank announced plans to launch a leasing subsidiary, which will soon take delivery of 25 aircraft to be leased to African airlines. This initiative aims to provide Nigerian airlines with access to dry-leased aircraft, enabling them to better service Bilateral Air Service Agreement, BASA, routes and domestic operations.

“Lereece Rose commended the Minister for his efforts in improving Nigeria’s aviation ecosystem, particularly in raising Nigeria’s Cape Town Convention score from 49.5% to 75.5 per cent. This progress underscores the country’s commitment to creating an enabling environment for aircraft financing and leasing.

“The Minister highlighted the critical need for partnerships that would enhance access to aircraft financing for Nigerian operators, facilitating growth and improved service delivery. In response, Afreximbank affirmed its readiness to work with the Nigerian government, signaling a promising future for the country’s aviation industry.

“A committee has been established to follow up on the discussions, ensuring that this partnership materializes into actionable solutions for Nigerian airlines.”

Economy

SEE Dollar (USD) to Naira Black Market Rate Today January 16, 2025 Aboki

Published

2 days ago

January 16, 2025

Naijablitznews

As of January 16, 2025, the Nigerian Naira (NGN) has continued to experience some level of volatility against the US Dollar (USD), while this has been the norm for decades now, this largely to some extent reflects the ongoing economic challenges.

See the Naira performance across various currencies

A quick check at the parallel market at Abuja Zone 4 market,as at January 16, 2025 , the black market exchange rate stands firmly at approximately ₦ 1,663.00 per USD. This means if you want to buy a dollar now, it is ₦ 1,663.00 while if you want to sell it is approximately ₦ 1,652.00 .

Please be aware that the parallel market or the black market rates are mostly and notably higher compared with what you get from the official market or CBN rate

Dollar to Naira (USD to NGN) Black Market Exchange Rate Today

Selling Rate ₦ 1,663.00

Buying Rate ₦ 1,652.00

Economy

Providus Bank Battles E-Settlement Company To Salvage N3.7 Billion Loan

Published

2 days ago

January 16, 2025

Kayode Sanni-Arewa

In a bid to salvage the sum of three billion, seven hundred and forty-three million, one hundred fifty-two thousand, five hundred and nine eighty Naira which was advanced to E- Settlement company, Providus Bank Limited has applied to a federal high court in Lagos urging the court to set aside an order granted the company to convene a meeting of its creditors to pass a scheme of arrangement.

In an affidavit sworn to by the Head, Loan Recovery & Remedial Management of Providus Bank Limited,Olayinka Lawuyi, he avers thus:

Providus Bank is one of the creditors of the E-Settlement Limited with the sum of N3,743,152,598.57 (three billion, seven hundred and forty-three million, one hundred and fifty-two thousand, five hundred and ninety-eight Naira, fifty-seven Kobo)being owed to it by E-Settlement Limited.

The bank provided E-Settlement Limited with an overdraft facility to the tune of N2,600,000,000 (Two Billion and Six hundred Million Naira only) upon its application to enable E-Settlement Limited to rebook its loan balance in order to enable it to repay from its current cash flow realities.

The said facility was due for repayment on 3rd January 2025, as the agreed tenor for the overdraft facility was 365 days.

Further to the paragraphs above, PROVIDUS bank and E-Settlement Limited had already taken steps towards an agreement/compromise with respect to the loan facility, and it is a shock to the bank that while negotiating the terms of a loan restructuring privately with the bank E-Settlement Limited has taken steps to hold a court-ordered meeting of all its creditors.

E-Settlement Limited approached the Court vide an Ex Parte application dated 23rd October 2024, seeking, amongst other things, an order mandating all the creditors of E-Settlement Limited to attend a meeting for the purpose of the E-Settlement Limited, proposing a Scheme of Arrangement and Compromise to all its creditors under Section 715 of the Companies and Allied Matters.

In E-Settlement Limited’s application to the Court, E-Settlement Limited indicated that it is indebted to its creditors in the sum of N12,458,553,150 (twelve billion, four hundred and fifty-eight million, five hundred and fifty-three thousand, one hundred and fifty Naira).

By E-Settlement Limited’s Scheme of Arrangement, it wishes to defray its entire alleged N12, 458,553,150 (twelve billion, four hundred and fifty-eight million, five hundred and fifty-three thousand, one hundred and fifty Naira) with the sum of $2,000,000.00 (Two Million US Dollars), which is to be full and final payment of its alleged indebtedness to all its creditors on a pro-rata basis. E-Settlement Limited stated in its application that it is indebted to the following creditors in the following amount.

Bank of Industry: N452,326,928
Kunoch Limited: N849,896,553
Vale Blue Finance Limited: N309,400,140
VFD Microfinance Bank Limited: N30,000,000
Kuda Microfinance Bank Limited: N1,510,193,217
PROVIDUS BANK Plc: N3,795,837,670
Emirates and Highbury Limited: N4,590,065,330
Advanced Technologies Nigeria Limited: N425,072,322,9
Aza Finance: N8,870,666
Kizento Project: N170,831,000
Salaries: N324,950,000

TOTAL, N12,467,443,826

E-Settlement Limited purposefully and intentionally misrepresented and suppressed several material facts before the Court, which ought to have been openly provided to enable the Court to reach an informed decision on the application.

Mr Lawuyi avers further that as a fact that E-Settlement Limited misrepresented and suppressed material facts from the Court in obtaining the orders:

The fact that E-Settlement Limited is negotiating privately with the Providus bank on a restructuring of its loan obligations E-Settlement Limited concealed the fact that of the 11 Creditors listed in the Scheme of Arrangement, at least 3 (Three) of the said Creditors have the same/similar Directors and are controlled by the same proprietors as E-Settlement Limited herein.

As a fact E-Settlement Limited and its alleged creditors have already arrogated to themselves 49.6% out of the 80% required by Section 715(1) to pass the Scheme of Arrangement.

The Scheme of Arrangement currently proposed by E-Settlement Limited is inherently unfair to PROVIDUS Bank

As a fact E-Settlement Limited commenced the application in Suit No: FHC/L/MISC/709/2024, vide an Ex Parte Originating Summons to obtain the order therein, without the Court hearing PROVIDUS BANK or any of the other creditors on the propriety of granting the said orders.

Further to the statement above, E-Settlement Limited obtained Court orders affecting the rights and interests in the loan facility extended to it without the Court first hearing PROVIDUS bank or giving it an opportunity to be heard, a breach of it’s right to fair hearing.

E-Settlement Limited misrepresented to the Court the true and actual position of its indebtedness.

The prayers sought in this application are to protect the rights and interests of PROVIDUS Bank the party, affected by the order.

Consequently, It is in the interest of justice to grant this application. E-Settlement Limited will not be prejudiced by the grant of this application. The court has adjourned for the hearing of the application.