"By the Powers Conferred on Me": CBN Revokes Licenses of Over 170 Microfinance Banks, Finance Companies
- CBN has revoked the licenses of over 170 microfinance, mortgage banks, and finance companies.
- Customers who might have money deposited in the banks are expected to withdraw their money
- The revocation of licenses results from various issues, such as insolvency, inactivity, failure to render returns, among others
PAY ATTENTION: Click “See First” under the “Following” tab to see Legit.ng News on your Facebook News Feed!
The Central Bank of Nigeria (CBN) has revoked the licenses of 179 microfinance banks, four primary mortgage banks, and three finance companies nationwide.
The announcement was made in the official gazette of the Federal Government, which was published on the CBN's website on Tuesday, May 23, 2023.
Why the banks' licenses were revoked
According to the gazette, these financial institutions had their licenses revoked due to several reasons.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Firstly, they had ceased to conduct business in Nigeria for six months, contrary to the purpose for which their licenses were granted.
Secondly, they failed to fulfil or comply with the conditions set forth when their licenses were issued.
Lastly, they did not meet the obligations imposed upon them by the CBN in accordance with the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5.
CBN speaks on failed banks
The Gazette noted that the decision to revoke the licenses was made by the CBN governor, Godwin Emefiele, exercising the powers conferred on the Central Bank under Section 12 of the BOFIA 2020, Act No. 5.
Part of the Gazette reads:
"I, Godwin Ifeanyi Emefiele, CON, the Governor of the Central Bank of Nigeria, hereby exercise the powers conferred upon me by Section 12 of BOFIA 2020, Act No.5. With this authority, I officially revoke the licenses of the microfinance banks, finance companies, and primary mortgage banks listed in Schedules I, II, and III attached hereto.
"This action is being announced on the 22nd of May, 2023, in Abuja."
List of failed banks by categories
Among the microfinance banks affected by the license revocation are:
- Gwadabawa Microfinance Bank
- Iba Microfinance Bank
- Edumana Microfinance Bank
- West-End Microfinance Bank
- Umejei Microfinance Bank
- Mouau Vasmucs Microfinance Bank
- Jamis Microfinance Bank
- New World Microfinance Bank
- Abestone Microfinance Bank
- Nsehe Microfinance Bank
- Osogbo Microfinance Bank
- Crossover Microfinance Bank
- Dangizhi Microfinance Bank
To check if a bank where you have money is included, you can click here and here.
Speaking on the CBN announcement, Professor, Ndubuisi Ekekwe explained that more microfinance banks in Nigeria will continue to fade.
He further predicted that more than 70% of existing (physical-only) microfinance banks will fade between 2025 and 2029.
He believes that the shift towards technology-based banking and the growing prevalence of lending apps have caused, and will continue to cause, the death of more physical microfinance banks.
"As the credit system evolves and matures, many banks will see troubles when consumer & SME lending recalibrates and these apps go ahead the opportunities."
Nigerian banks send messages to customers on tax clearance for FX transactions
In another report, Nigerian banks now require customers to present a valid Tax Clearance Certificate for purchasing dollars and other foreign currencies.
The regulation covers a wide range of transactions, including Personal Travel Allowance and Business Travel Allowance.
Banks have started informing customers who want foreign currencies at the official rate compared to the easy buy more expensive black market rate.