The Central Bank of Nigeria (CBN) has revoked the operating licences of 46 microfinance banks, effective 1 July, citing the institutions’ failure to meet regulatory requirements for continued operation.
The apex bank announced the decision in a statement issued on Wednesday, saying the revocation was carried out in accordance with its powers under Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA), 2020.
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According to CBN, the revocation was approved by its Governor, Olayemi Cardoso, following the affected banks’ failure to satisfy the conditions required to continue operating as licensed financial institutions.
CBN said the decision was necessary due to one or more regulatory breaches by the affected institutions.
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According to the revocation order, the reasons include insufficient assets to meet liabilities, closure of operations without the CBN’s approval, and inactivity and cessation of financial intermediation.
The other reasons for the revocation of the microfinance banks’ licences include failure to commence operations within 12 months of licence approval and failure to maintain the minimum capital funds unimpaired by losses.
The apex bank said the action forms part of its ongoing efforts to strengthen oversight of the financial system and ensure that licensed financial institutions comply with extant laws and prudential regulations.
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“The revocation of the licenses 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,” CBN said.
It added that it remains committed to promoting a safe, sound, and resilient financial system through effective supervision and, where necessary, enforcement.
“The Central Bank of Nigeria remains committed to promoting a safe, sound, and resilient financial system and will continue to take appropriate supervisory and regulatory actions, where necessary, to maintain public confidence in the Nigerian financial system,” the apex bank added.
The licence revocations are the latest in the CBN’s efforts to intensify the supervision of banks and other financial institutions, with a focus on corporate governance, risk management, regulatory compliance, and financial stability.
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