First of all, introduction

Sometime in November 2010, the Central Bank of Nigeria (“CBN”) revoked the licenses of certain grade A bureaux de change around the country.[1] More recently, on the 14th January, 2013, the CBN once again announced that it was revoking the licenses of 236 bureaux de change (“BDCs”). The viability or otherwise of this policy is beyond the scope of this discourse. But the issue of its legality or otherwise will come under the spotlight. More so, considering the fact that the CBN have recently been seen as an autocracy. Due to certain of its unpopular recent policies.

Now Legally Speaking

Can the CBN revoke licenses of BDCs? If it can, the how must the CBN go about it? If it cannot what are the stakes? Lets attempt to answer these posers concisely. 
Section 61(1) of the Banks and Other Financial Institutions Act (“BOFIA”)[2] empowers the CBN to supervise and regulate the activities of financial institutions in this country. Which invariably includes BDCs. Subsection (2) of that same Section gives the CBN to carry out regular and routine checks on the books (and by implication activities) on these institutions. Specifically, Section 34 (1)(i) empowers the CBN to examine the books and affairs of bureaux de change. The power to examine is very important because, as in the case of banks, it is after examination the CBN can determine whether the situation of the bureau de change or financial institution, as the case may be, is so dire that it must intervene to protect the interest of the public.

So if after examination, the CBN finds that the institution is “failing” then it can take a first line of action of stopping the institution from advancing credit facility or instructing it to take certain steps or removing officers of the institutions, much as it applies to banks. This procedure is provided for under Section 35 of BOFIA, a section which clearly refer to banks. But Section 62 and 63 mandates this procedure also for other financial institutions before setting its own paradigm.

If after the first line of action provided for under Section 35, the situation does not improve then the CBN can turn over the control and management of the institution to other person(s) which it appoints. It is after this doesn’t work, that the CBN can now say: “oh, your time is up!” and revoke the license of the institution.[3]That’s how the CBN must go about it.

So the CBN can actually revoke the licenses of bureaux de change. But it must embrace the legally required procedure in doing so else it may become subject of litigation.

Whether the CBN followed the legally provided procedure in revoking the licenses of 236 BDCs on January 14, 2013, we cannot immediately tell. But one thing is certain, if it did follow the legally prescribed procedure then, kudos to Sanusi and his team but if it did not, then its action will be arbitrary and illegal and will most likely not stand the hammer of the court.

See you next week!

[1] CBN Press Release dated November 3, 2010
[2] Cap B3 LFN 2004.
[3] Section 62(1)(2)(3) BOFIA.

About the author

Nigerian Law Today

NLT’s mission is to take legal-content writing to the next level in Nigeria by leveraging legal expertise and technology. We publish fresh, original, and insightful articles on areas of law we cover.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.


  • The Sanusi leadership is prone to acting with impunity, no doubt he did not comply with the requisite provisions of the laws. I would like to be among the complainant's counsel. Hahaha! Soliciting! –Charles Dennis.

  • The Sanusi leadership is prone to acting with impunity, no doubt he did not comply with requisite provisions of the law. I wish to be among the plaintiff's counsel. Hahaha! Soliciting!

  • Charles, the truth is that the CBN Act and the BOFIA gives the CBN governor very wide powers. That makes it difficult to legally curtail him, that's why we can only fault him on procedures not powers! Thanks for commenting and please enjoy other posts.