The Central Bank of Nigeria (CBN) on Tuesday revoked the operating licences of 132 Microfinance Banks (MfBs), three finance companies and four Primary Mortgage Banks (PMBs).
The affected MfBs include Atlas Microfinance Bank, Bluewhales Microfinance Bank, Everest Microfinance Bank, Mainsail Microfinance Bank, Nopov Microfinance Bank, Ohon Microfinance Bank, Premium Microfinance Bank and Statesman Microfinance Bank.
Others include Manny Microfinance Bank, Reality Microfinance Bank, Osina Microfinance Bank, Zikado Microfinance Bank, Taraba Microfinance Bank, and Ndiagu Microfinance Bank.
Meanwhile, the Nigeria Deposit Insurance Corporation (NDIC) has assured depositors of the closed banks speedy payment of their insured sums.
The finance companies – HHL Invest and Trust Limited, TFS Finance Limited and Treasures & Trust Limited – also had their licenses revoked by the CBN.
The affected PMBs, which also lost their licences are Resort Savings & Loans, Safetrust Mortgage Bank, Adamawa Savings & Loans and Kogi Savings & Loans.
In the Federal Government of Nigeria Official Gazette released yesterday, the apex bank said the Microfinance Banks, Finance Companies and Primary Mortgage Banks have ceased to carry on the type of business for which their licences were issued for a continuous period of six months.
According to the Gazette signed by CBN Governor, Mr Godwin Emefiele, the affected institutions also failed to fulfil or comply with the conditions subject to which their licences were granted.
They equally failed to comply with the obligations imposed upon them by the Central Bank of Nigeria in accordance with the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5.
“Now therefore, I, Godwin Ifeanyi Emefiele, CON, Governor of the Central Bank of Nigeria, in exercise of the powers conferred on the Central Bank of Nigeria under Section 12 of BOFIA 2020, Act No.5, hereby revoke the licences of the Microfinance Banks, Finance Companies and Primary Mortgage Banks stated in Schedules I, II and III attached hereto,” Emefiele stated in the report.
The CBN regulatory guidelines stated that an MfB unless otherwise stated, shall be construed to mean any company licensed to carry on the business of providing micro-finance services such as savings, loans, domestic fund transfers and other financial services that economically active poor, micro-enterprises and small and medium enterprises need to conduct or expand their businesses as defined by these guidelines.
According to the CBN, MfB licensed to operate as a unit bank (Community bank) shall operate and open branches within a specified local government area. The minimum capital requirement shall be N20 million or such amount as may be prescribed by the CBN from time to time.
Microfinance Bank is licensed to operate in a State and open branches within a specified state or Federal Capital Territory; the minimum capital requirement of N1 billion only or such an amount as may be prescribed by the CBN from time to time.
The Finance Company sub-sector was envisioned to operate within the middle tier of the financial system, with a focus on the Micro, Small and Medium Enterprises (MSMEs) segment. “A Finance Company unless otherwise stated, means a company licensed to carry on Finance Company business. Finance Company Business means the business of providing financial services to individual consumers and industrial, commercial, or agricultural enterprises,” the CBN rules stated.
Equally, a PMB shall be construed as any company that is licensed to carry out primary mortgage banking business in Nigeria. The Primary mortgage banks are permitted to engage in mortgage finance, real estate construction finance within the permitted limits, acceptance of savings and time\term deposits and acceptance of mortgage-focused demand deposits.
The Nigeria Deposit Insurance Corporation (NDIC) has assured depositors of the closed banks speedy payment of their insured sums.
NDIC Managing Director/Chief Executive, Bello Hassan gave this assurance in a statement which followed the revocation of the licenses of the affected MFBs and PMBs by the Governor of the CBN, Godwin Emefiele.
Hassan said, as a deposit insurer, the NDIC would begin the process of payment of the insured sums immediately with the verification of eligible depositors at the respective premises of the closed banks.
He enjoined such depositors to get the required documents for the exercise such as proof of account ownership, verifiable means of identification and alternate bank account to facilitate their seamless verification and payment of their insured deposits.
The NDIC boss stated that the insured deposit is the 1st claim that the Corporation pays to depositors upon revocation of the bank’s license by the CBN, adding that the maximum specified limits for the MFB and PMB sub-sectors are N200,000 and N500,000 per depositor per bank, respectively.
As liquidator, Hassan disclosed that the Corporation has also put machinery in motion to commence sales of assets of the defunct banks as well as recover debts owed to them in order to declare liquidation dividends on pro rata basis to the affected depositors with claims exceeding the maximum insured sums of N200,000 for MFBs and N500,000 for PMBs.
He assured that regulatory authorities are leaving no stone unturned to ensure that the soundness of the banking system is not compromised, stressing that there is no need for the public to panic over the safety of their bank deposits.
