The Central Bank of Nigeria (CBN) has revoked the operating licences of 46 microfinance banks across the country over their failure to comply with regulatory requirements.
The apex bank announced the decision in a statement issued on Wednesday by its Acting Director of Corporate Communications, Hakama Sidi-Ali, noting that the revocation takes immediate effect.
According to the CBN, the action was taken pursuant to Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA), 2020.
The bank said the affected institutions failed to meet the conditions required to continue operating as licensed financial institutions.
It explained that the affected microfinance banks were found to have committed one or more regulatory infractions, including having insufficient assets to meet liabilities, shutting down operations without obtaining the approval of the CBN, prolonged inactivity and cessation of financial intermediation, failure to commence business within 12 months of obtaining a licence, and inability to maintain the required minimum capital unimpaired by losses.
The CBN said the move forms part of its ongoing efforts to strengthen the banking sector, safeguard depositors’ funds, and ensure compliance with extant banking laws and regulations.
“The revocation of the licences is part of the bank’s ongoing efforts to safeguard the stability of the financial sector, protect depositors, and ensure that licensed institutions comply with current laws and regulatory requirements,” the statement read.
The apex bank reaffirmed its commitment to maintaining a safe, sound and resilient financial system, adding that it would continue to take appropriate supervisory and regulatory actions to sustain public confidence in Nigeria’s financial sector.