Recapitalization Deadline: BDCs In Talks With CBN, Seek Extension To Dec 31

Following the expiration of the June 3, 2025 recapitalisation deadline for Bureau De Change (BDC) operators, a majority of players in the sector are seeking a second extension from the Central Bank of Nigeria (CBN). Despite the lapse of the initial grace period, discussions between BDC representatives and the apex bank are ongoing. The operators, through their association ABCON, have proposed a new deadline of December 31, 2025, to allow more time for compliance with the stringent capital requirements.

The CBN’s silence on whether an extension will be granted has left the sector in uncertainty. The new regulatory requirements—₦500 million for Tier 2 BDCs and ₦2 billion for Tier 1—have proven too steep for most. According to ABCON president Aminu Gwadabe, more than 95% of BDCs have not met the new capital thresholds, leading to the closure of over 1,500 businesses and the loss of millions of jobs nationwide. He stressed that only an extension can prevent further extinction of smaller players and allow for wider participation in ongoing reforms.

The recapitalisation is part of a broader strategy by the CBN to sanitise the foreign exchange market, improve corporate governance, and align operators with Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) standards. While some BDCs argue that the transition has been abrupt, the CBN appears intent on enforcing higher standards. The bank’s reforms signal a move toward a more transparent and efficiently regulated BDC ecosystem.

Industry experts suggest that the recapitalisation requirements are not merely punitive but strategic. Ayokunle Olubunmi of Agusto & Co. believes the CBN’s real goal is to reduce the overwhelming number of BDCs operating with minimal oversight and limited economic value. He notes that the regulator would prefer to engage with a smaller number of well-capitalised and professionally managed entities.

Looking ahead, the foreign exchange landscape may shift significantly. Olubunmi foresees increased consolidation, with smaller BDCs either closing down or partnering with larger firms under commission-based models. He also highlighted the rise of digital transactions over traditional cash dealings, suggesting a future where tech-enabled, formalised BDC operations will dominate, in line with global financial trends.

Source: Leadership