I need someone to educate me. How do banks go behind to sell forex to BDC? I know banks sell PTA, BTA and through visible and invisible foreign transactions. In what way will the bank hoard forex and look for ways to sell to the BDC?

divinehand2003:
BDCs are already well established businesses. Their networks will make it impossible to pull them down.

Whether CBN likes it or not, customers will prefer doing business with BDCs than going to join endless queues in Nigerian banks.

All CBN needs to do is to ban all form of street trading of hard currencies, Bank should be stepped up to function at this capacity. But what is happening here is that, many of the outsourced hard currency are money made through fraudulent means and such will not want to go through the banking system without raising a flag and traced back to the source.
Nigerians lives in fraud and we are at peace with our fraud, that is why you see people against the CBN on BDC Ban.
If you have legitimate dollar to bring in, take it through the bank and the bank will also have enough to give those that needed to use it outside the shore of Nigeria, but those simple economic terms is a stranger to fraudulent Nigerians and they want out Naira to remain strong when they are still the one sabotaging it at such crazy scale.

frankmoney:
Lies..... You buy more dollars from your customers than CBN ?

What is the lie there? I assume you have not changed your foreign currency on the street.

The street at a go can be as high 100,000 dollars per transaction in some cases..

The abokis you see by the roadside are just foot soldiers for the BDCs.

lanocfoods:
The policy seems to have a positive effect, dollar is down to 400+ as against 500+ before the policy. Hope prices of goods and commodities will come down too. Kudos to emefile

I think you're mixing up the official rate and parallel rate

I’m surprised no one is doing the maths . At 20,000 dollars per week . That’s 80,000 dollars per month per BDC . If you buy from government at 415 and sell at at black market rate of just 495 . That’s 80 naira profit per dollar . That’s 6,400,000 naira profit in 1 month . 76,400,000 in a year . . And this is outside the dollars they buy and sell to customers directly .

For me it is not the BDCs fault that they were making that kind of money . It was the regulator’s (CBN ) stupidity of fixing dollars against naira officially and starving regular Nigerians of access to dollars from their accounts or banks thereby creating scarcity and forcing most Nigerians to have only the BDCs as their only source and pushing the Black market rates up

ecolime:

Hope you know their so called networks won't sell to them at N410... lol

By the way, CBN has no business selling dollars to BDC operators in the first place. Those guys were making a killing just by owing a BDC licence. All these at the expense of me and you.

License they paid for...

Do you know how much most of those guys paid for the license. Or you think the license is free?

Hmmm... Emiefele won't tell you this.

If BDC's get shut down. Banks should also be closed.


Or don't you think so. The banks we so glorify steal from the people more than the BDC's...

frankmoney:
Lies..... You buy more dollars from your customers than CBN ?

Yes, they buy more from customers but the rate differs.
CBN sells at a cheaper rate, but from their external customers they buy in bulk but with high price.

Invariably, this action will make the USD to NGN go up again.

Hammyaladin:
License they paid for...

Do you know how much most of those guys paid for the license. Or you think the license is free?

Hmmm... Emiefele won't tell you this.

If BDC's get shut down. Banks should also be closed.


Or don't you think so. The banks we so glorify steal from the people more than the BDC's...

Total fees for new applicants are N35M, N1M and N100k. That's N36.1M and it is absolutely refundable by CBN with interest.

I do not hold brief for Banks but I am fully convinced that BDC is a huge drain on our lean resources.

Everyone wants to be a operator because it's a cheap and easy way to make cool cash. The masses are paying for it. BDCs were buying at N410 and selling at N505. Banks can never try this.

Baba, reason am na... Abi you sef na operator?

Mitsurugi:


It's kinda true. I'm a lawyer for a BDC that doesn't depend on what the CBN doles out considering the volume of transactions it does in a week. A customer did business worth 67000USD just on Monday. BDCs also transfer cash to countries their customers desire so it's not just strictly exchange.

bro cbn just took out their customer base. They just haven't noticed it yet with time more people will be changing at the banks. Leading to a smaller supply of dollar for BDCs. They better start innovating before its too late

Hungry4sex:
bro cbn just took out their customer base. They just haven't noticed it yet with time more people will be changing at the banks. Leading to a smaller supply of dollar for BDCs. They better start innovating before its too late

There are BDCs that run their businesses properly with target goals. They are never affected as their daily business goes beyond collecting from CBN and selling. This is just a call for them to work harder.

eluquenson:
Yes, they buy more from customers but the rate differs.
CBN sells at a cheaper rate, but from their external customers they buy in bulk but with high price.

Invariably, this action will make the USD to NGN go up again.

You are right . People don’t understand the dynamics of running an import based economy . Few of the things we use are produced locally . Most conglomerates that produce locally borrow money from overseas and have to repay such loans from naira to dollars ( even Dangote is on this table ) .
The nice shirts/dresses , nice kid toys , nice tokunbo cars etc that we drive are bought with dollars sourced mostly from BDCs under this government . So imagine a good BDC company can attract dollars from people who can earn it to the tune of 50,000 dollars per week and they can sell it at 2 to 3 naira profit . That is 150k per week which is not small change . Attract more dollars from sellers , increase your profit margin . People will trade more with BDCs if they can only avoid banks bottlenecks and queues .
I remember before Buhari , you could Buy anything abroad with your naira debit card with your bank charging you at the official rate .
My 2 cents: This policy will not work until the regular Nigerian has access to exchange dollars using their naira cards . If need be , peg it at 1000 dollars per month . So that there won’t be unusual pressure on BDCs to supply .

Mitsurugi:



There are BDCs that run their businesses properly with target goals. They are never affected as their daily business goes beyond collecting from CBN and selling. This is just a call for them to work harder.

well said. Personally i think we might be be seeing the start of hedgefunds or forex firms that trade currencies like banks. Anyway it goes I think it's Nigerians that benefit

How much did they buy and much did they sell?
Can companies sell to them at 409 Naira?

The money they have chop over the years is enough

divinehand2003:
BDCs are already well established businesses. Their networks will make it impossible to pull them down.

Whether CBN likes it or not, customers will prefer doing business with BDCs than going to join endless queues in Nigerian banks.

Most Nigerian citizens are educated illiterate. The question is do they buy at 390 from those customers? Does it make sense to buy 20k usd weekly at 390 and sell at 500? If they buy now directly from customers and also sell to customers will they make the same crazy profit they make when they get from CBN?
This policy is brave policy and a very important for this country. If you don't understand what CBN is trying to do just keep quiet.

frankmoney:
Lies..... You buy more dollars from your customers than CBN ?

Ask them at what rate do they buy from customers so we can compare with what they are getting from CBN.

Gten:
In Zone 4 Abuja, those guys are doing business as usual, I don't think the ban affects them that much.

They were not ban from doing business oga. CBN only ban sales to them. It means that they cannot buy from CBN.

legba1:
Those folks had been trading even b4 emefiele graduated from school

Educate yourself on the policy. They were not ban from doing the business but the ban is they cannot buy from CBN

Oracleforce:
Emefiele is run out of ideas...he is looking for how to gain people's attention...so, he introduces all kinds of stupid policies...
Meanwhile, the source and power that backed these people up are beyond the shores of this country.
And this is the reason why a businessman shouldn't rely on government sources alone. As a businessman, your business should go beyond the shore of this country because if any government want to deal with you, he can do it successfully knowing fully well that all your investment is on the shores of this country....and Nigeria's government often are not reliable they usually change policies NEPA light ..meanwhile, BDC has been in existence before emefiele was born...some of this BDC owners were even born into the business. They know the dynamics of the business and they have powerful networks...I was surprised one day when Aboki dollar told me that if I want to change one million dollars the money is available...

Lol see you when get ideas and yet you cannot understand a simple policy....smh.

ecolime:

Hope you know their so called networks won't sell to them at N410?... lol

By the way, CBN has no business selling dollars to BDC operators in the first place. Those guys were making a killing just by owing a BDC licence. All these at the expense of me and you.

Please Educate them my broda....How do ppl come out to speak without understanding a simple policy

blaise26abj:
I’m surprised no one is doing the maths . At 20,000 dollars per week . That’s 80,000 dollars per month per BDC . If you buy from government at 415 and sell at at black market rate of just 495 . That’s 80 naira profit per dollar . That’s 6,400,000 naira profit in 1 month . 76,400,000 in a year . . And this is outside the dollars they buy and sell to customers directly .

For me it is not the BDCs fault that they were making that kind of money . It was the regulator’s (CBN ) stupidity of fixing dollars against naira officially and starving regular Nigerians of access to dollars from their accounts or banks thereby creating scarcity and forcing most Nigerians to have only the BDCs as their only source and pushing the Black market rates up

Exactly what I found when I calculated it. 6.4 Million a month!!! given to mostly hausa people - 80% of BDC owners are northerners. 74.6 million a year per person!!!. About 420 billion in a year for the 5600 DBCs. Over a billion dollar given to hausa people every year from oil money, on top of the profit they make.

What do the fictional Niger Delta people get from the oil?

divinehand2003:

https://thenationonlineng.net/how-we-get-forex-by-bdcs/

nawa oo, der won stop mak blogger run brok lol.

ecolime:

Total fees for new applicants are N35M, N1M and N100k. That's N36.1M and it is absolutely refundable by CBN with interest.

I do not hold brief for Banks but I am fully convinced that BDC is a huge drain on our lean resources.

Everyone wants to be a operator because it's a cheap and easy way to make cool cash. The masses are paying for it. BDCs were buying at N410 and selling at N505. Banks can never try this.

Baba, reason am na... Abi you sef na operator?

Nahh! My Dad friend is...... And he's a Good man!


And if we are to be honest, majority of BDC customers aren't regular Nigerians...


Cause how many NIGERIANs they see dollars?!

DubaiLandLord1:
You're wrong about this. On the long run, most of them will run out of business.

All those established by corrupt CBN officials will die a natural death.

What do you know about BDC?

frankmoney:
Lies..... You buy more dollars from your customers than CBN ?

divinehand2003:
BDCs are already well established businesses. Their networks will make it impossible to pull them down.

Whether CBN likes it or not, customers will prefer doing business with BDCs than going to join endless queues in Nigerian banks.

You are ignorant of the laws of demand and supply..

More people would prefer to go to the banks for forex at 412 than a BDC at 509, if they have excess, they would obviously want to sell to the BDC to make margin, which the BDC would refuse soonest or be forced to offer little margin over bank sale rates because you cant be dumping dollars on them with little purchase. Which is why the price is already crashing.

Esseite:


You are ignorant of the laws of demand and supply..

More people would prefer to go to the banks for forex at 412 than a BDC at 509, if they have excess, they would obviously want to sell to the BDC to make margin, which the BDC would refuse soonest or be forced to offer little margin over bank sale rates because you cant be dumping dollars on them with little purchase. Which is why the price is already crashing.

Bank will only sell forex for PTA/BTA, Medical or school payment. There are FAR more reasons why Nigeria need forex than this. Do you not know the hundreds of items that are prohibited from sourcing forex from official sources? Where do you think their demand for forex goes?

If you want to buy a car from US, will bank give you the $20k you need? Or if you are doing side hustle of buying phones, laptops and other gadgets from abroad, is it bank those guys buy from?

Point is there is still lot of demand out there that cannot be met by Banks directly.

oluwaseyi0:
The customer they buy from is the bank

Banks sells to them through back doors. Let CBN be deceiving themselves.

DubaiLandLord1:
You're wrong about this. On the long run, most of them will run out of business.

Not true,
You think it is easy to get fx from the bank?
What of those importing things in the CBN fx ban list?
Where do you think they will be getting forex from?
Nothing will happen to BDCs,price might drop but trading will continue.

Emefiele is a confuse man, he and president Buhari are the same they both always take wrong step to solve simple task. I spit on them

COMPAQ:


Bank will only sell forex for PTA/BTA, Medical or school payment. There are FAR more reasons why Nigeria need forex than this. Do you not know the hundreds of items that are prohibited from sourcing forex from official sources? Where do you think their demand for forex goes?

If you want to buy a car from US, will bank give you the $20k you need? Or if you are doing side hustle of buying phones, laptops and other gadgets from abroad, is it bank those guys buy from?

Point is there is still lot of demand out there that cannot be met by Banks directly.

The bank involvement would greatly impact on the general rates.. we still have those outside the book purposes today but we see the price crashing daily.. why?... because the supply is outweighing the demand on the BDC side.

For imports, people have bypassed the BDC's.. Nigerian organizations are now set up in various countries where you credit their naira account here and your payment is made abroad to the individual or organizations with a single transaction lien on transfer company account here in Nigeria until payment is received by your contact..

CBN was giving them $20k a week. You know how much dollars they trade a day? That $20k is not what they've been relying on. They have their way. In fact, bank sell at 412, meaning that banks buy from customers at less than 412. BDC on the other hand buy from customers at higher than 412. Hence, BDC will always be getting supplies directly from customers.

Going by the CBN directive, bank may not even sell dollars to you if they feel you don't need it that much. BDC will always sell dollars to you whether you need it or not. In fact, you can meet aboki, give am Naira and collect dollars on the spot. You have to pray before asking banks for dollars.

At the end of the day BDC has come to stay.