The Association of Bureaux De Change Operators of Nigeria (ABCON) is seeking the merger and consolidation of bureau de change (BDC) operators while kicking against recapitalisation of the industry.
It said consolidation would improve corporate governance and rules of engagement with the apex bank.The merger option was adopted for class ‘A’ BDCs in 2007/2008, which entitled them to $1 million weekly allocation with a N500 million capital base, the association said.
The group, in a statement, called for a similar business model through mergers and consolidation rather than an outright review of the capital base of each operator.
It claimed that as a result of the consolidation process, the Central Bank of Nigeria (CBN) would be in a stronger position to govern the BDCs. According to a statement from ABCON President Dr. Aminu Gwadabe, each of the BDCs with a license from the CBN is capitalized to the tune of N35 million and should be permitted to voluntarily consolidate among themselves.
Gwadabe claimed that the group requested a merger of at least 10 BDCs to create additional capital of N350 million rather than an increase in the allowed capital base for each BDC of N35 million.
He said that the change will broaden the operation's scope and increase diversification through a number of windows. He said that combining several BDCs into one larger, more powerful organization would position them for a more important role in the financial system, including managing remittances from the diaspora or other offshore funds to expand FX access.
According to Gwadabe, the apex bank's 2004 consolidation exercise involving the merger of several commercial banks is a model that the BDCs should follow in order to reduce their size and present controllable operators for maximum impact.