Licensed Forex Bureau Operators Reportedly Against Central Bank Capital and Mandatory Deposit Increments

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The Central Bank of The Gambia Building in Banjul

By Kebba Ansu Manneh

The Association of Licensed Forex Bureaus (ALFOB) in The Gambia Is unhappy about the new Capital and Mandatory Deposit charges set by the Central Bank of The Gambia (CBG) for foreign exchange bureaux.

Forex Bureau operators have confirmed to TAT that the Central Bank increased the bureaux’ Capital requirements from D3 million to D10 million and the Mandatory Deposit fees from D1 million to D3 million, without any interest bearing on the mandatory deposit.

ALFOB was established in 2004 to represent the interest of operators of foreign exchange bureaux in The Gambia.

One ALFOB executive committee member believes the move contradicts the Central Bank’s financial inclusion policy.

It will also force many forex bureau operators, especially the significantly smaller Gambian operators, to cease operations as most need more means to meet the capital and mandatory deposit requirements of the Central Bank and remain in business.

TAT heard from sources that after a meeting attended by ALFOB members and CBG Governor Buah Saidy, the association’s representatives had expressed concern about “Governor Saidy’s aggressive tone” during the meeting.

They also complained about his insistence that the CBG’s new “guidelines” are immediately applicable, even though he was reminded that the bureaux need time to amend their legal documents to reflect the changes.

Buah Saidy insisted that was unnecessary, but an ALFOB executive member informed TAT that their lawyer advised them that the guidelines can only be effective when gazetted and signed by the President.

He said the Governor should have known all that before immediately imposing the new guidelines on them.

TAT has made efforts to reach the Central Bank senior management, who have yet to respond to our questions.

Our source said ALFOB recently held an emergency meeting to sound the opinion and position of members on the unilateral increment imposed by the Bankers’ Bank.

Bureau operators “felt very disappointed by the increment, solely designed to kick operators out of the market.”

According to this person, previous management of the Central Bank always provided them with the draft of new policies for their feedback before they were finalized and passed as regulations.

“Most members feel very bad and disappointed with the Central Bank’s decision to increase the Capital and Mandatory Deposit charges.

“The increment is exorbitant, misplaced, and designed to force operators out of business,” this ALFOB executive committee member told TAT.

He added: “We (ALFOB) have all rejected the new increment and taken a common position. First, we intend to write to the Central Bank and the Ministry of Finance and Economics Affairs to express our total disapproval and rejection of the new requirements.”

Another ALFOB executive member also told TAT that If legally registered forex bureau operators are forced out of business, the implications are, among others, the resurgence of more black market operators and redundancy of forex bureau employees.

He went on to say that this will also lead to a loss of revenue by both the Central Bank and the Gambia Revenue Authority.

He pointed out that they are not deposit-taking financial institutions. He wondered what the mandatory deposit aims to achieve other than discouraging Gambians from investing.

For instance, he alleged that a foreign company in the local fin-tech industry mobilizes massive deposits but has paid out the Central Bank since it started operations two years ago.

“We are calling on the government of President Barrow, particularly the Ministry of Finance and Economics Affairs, to intervene before the matter gets out of hand.

“This move is unfair, outrageous, and dangerous for our businesses because, if action is not taken, many bureaus will be closed eventually with over one thousand employees affected.”

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