10 Reasons Why CBN Revoked Licenses of 46 Nigerian Banks
- The CBN revoked the operating licences of 46 microfinance banks after finding they no longer met regulatory requirements
- Reasons for the revocation include insufficient capital, inability to meet liabilities, prolonged inactivity, and operating without approval
- The apex bank said the action is aimed at protecting depositors, strengthening financial stability, and ensuring only sound financial institutions
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Central Bank of Nigeria (CBN) has clarified the reasons behind its decision to revoke the operating licenses of 46 microfinance banks.
The apex bank, in a statement signed by its Acting Director of Corporate Communications, Hakama Sidi-Ali and released on Wednesday, July 1, highlighted various regulatory breaches, including under-capitalisation and prolonged inactivity, as grounds for the revocation.
Source: Twitter
The CBN stated that the licenses of these microfinance banks were revoked on July 1, 2026, following approval by its Governor, Olayemi Cardoso, in accordance with the provisions of the Banks and Other Financial Institutions Act (BOFIA), 2020.
According to the bank, the affected institutions did not meet the requirements for remaining licensed as financial institutions, thus leading to the withdrawal of their operating licenses as part of its efforts to enhance oversight of Nigeria's financial system, BusinessDay reports.
The CBN emphasised that this action is consistent with its ongoing commitment to safeguard the stability of Nigeria's financial system, protect depositors, and ensure licensed financial institutions adhere to relevant laws and prudential standards.
The statement said:
"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."
Microfinance banks are integral to the Nigerian economy, offering vital financial services and credit to low-income segments of the population, small businesses, and previously underserved communities.
This latest move highlights the challenges faced by certain segments of Nigeria's microfinance banking industry, which have grappled with insufficient capital, poor corporate governance, and depreciating loan portfolios amidst persistent inflation and high interest rates.
Source: UGC
10 reasons CBN revoked 46 banks' licenses
The CBN outlined ten reasons why the licenses of the 46 microfinance banks were revoked:
- Failure to meet the requirements for continued operation as licensed financial institutions.
- Assets below liabilities, making the institutions financially unstable.
- Stopping operations without CBN approval.
- Prolonged periods of inactivity or dormancy.
- Failure to commence business within 12 months of obtaining a licence.
- Failure to maintain the minimum capital requirement.
- Failure to meet operational conditions for licensed financial institutions.
- Non-compliance with the Banks and Other Financial Institutions Act (BOFIA), 2020, and other regulations.
- Weak capitalisation and poor financial structure.
- Governance deficiencies and deterioration in asset quality.
Full list of the banks shut down can be downloaded here
CBN approves another new bank operation in Nigeria
Earlier, Legit.ng reported that Bank78 MFB has officially commenced operations as a private digital lender in Nigeria.
The bank stated that although it is inspired by private-banking culture and mindset, it is deliberately designed for the mass-affluent everyday Nigerian, offering a secure and premium digital banking experience.
The bank said it aims to bridge the gap between fast-growing fintech firms and traditional legacy banks.
Source: Legit.ng
