About half of bureaux de change currently operating in the country are likely to close as they will fail to meet new licensing requirements, a senior Central Bank officer, has said.
The Microfinance and Bureau de Change Supervision Manager of the Central Bank, Eliamringi Mandari said early indications showed that many bureaux de change will not qualify for the new licences due to strict regulations introduced to enhance sanity in the sub sector as part of a wider crackdown on money laundering. The bureaux have been blamed for capital flight and money laundering by some senior government officials.
By mid last year, the BoT data showed 297 bureaus were eligible for re-licensing. Preliminary results from received applications indicate that some may not qualify for the new licence. “Already 34 bureaus have opted out while 86 others saw their licences revoked…,” He said so far some 71 bureaus have been qualified and among them have branches totaling 40 units. Also 65 bureaus application are still worked on until mid this month.
In total, so far, two weeks before final announcement the total bureau outlets are 111 units. The new bureau de change regulations, from last June, including having minimum capital of 300m/- up from 100m /- for class ‘A’ bureaus that are doing spot transactions. For class B capital requirement jumped from 250m/- to 1.0bn/- and deposit at BoT from 50,000 US dollars 100,000 US dollars. “So far two out of four class B bureaus have qualified,” Mr Mandari said.
Class ‘Bs’ are those bureaus that apart from doing spot exchange also performs money transfer on behalf of financial institutions—including opening letter of credit. Other regulations are that a person shall not become a shareholder, a director, a member of management or a staff in more than one bureau.
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