Local forex bureau operators have until June to ensure that their operations are within the provisions of the Central Bank or risk being out of business.
Operators in the sector were in March last year given a list of regulations and requirements to comply with, accompanied by a moratorium barring new players from entering the sector.
Central Bank Governor John Rwangombwa said the regulator was yet to crack down on forex operators despite issuing the new regulations.
This he said was to provide them with ample time to comply with the requirements, as well as raise minimum capital requirements.
The deadline to comply with the regulations and requirements was August last year.
The new requirements and regulation include revision of minimum capital for forex bureaus from Rwf20 million to Rwf50 million, revised framework bureaus’ staff skills, qualifications and experience.
Forex bureaus will also be required to have management information system tools and modern equipment, mandatory for effective conduct.
This could see multiple operators shut down operations across the country, especially due to challenges in raising capital as well as meeting other requirements.
“The moratorium came with new instructions increasing their capital requirements. We have been hesitant to follow up on implementation. This was supposed to have been done by August last year, but we were trying to be lenient with them as they raise capital. Any mergers and failure to continue will depend on failure to raise more capital,” Rwangombwa said.
The governor was yesterday speaking at press briefing following quarterly monetary policy and financial stability committee meetings.
The new regulations triggered fears among a section of operators, who said the minimum capital requirements were quite high given the scale of their operations.
Some said that this development could cause them to halt operations, while others said it could cause them to lay off staff.
The new regulations require that a manager of a forex bureau must, at least, have a bachelor’s degree in accounting, finance, management or any other field with adequate knowledge of foreign exchange operations or five years of experience in forex bureau business.
Senior management of forex bureau operators are also required to have at least a degree or an A-Level certificate of secondary education (A2) with 5 years of experience in forex bureau activities.
A spot check by The New Times established that this could put a majority of ‘manager’ title holders across the city fall short of the minimum requirements, while other operators said it will raise cost of operations.
Alphonse Murangwa, who manages a Kigali-based forex bureau, said business survival for a number of operators is uncertain owing to the requirements.
However, the governor said there has been a lot of improvement in regard to the professionalism in recent months with instances of speculation and other fraudulent practices uncommon.
“We think their association (association of forex operators) has had a positive impact in the sector’s operations and in facilitating engagement with the industry. We have been working with them to deal with illegal dealers in the sector and to remove distortions. The challenges that we had then of speculative tendencies is not as common now as they have improved operations,” Rwangombwa said.
Following a recent inspection by the regulator, none of the licenses has been revoked, thanks to improvement in operations, he said.