The Central Bank of Nigeria (CBN) revokes the licenses of 139 microfinance and primary mortgage banks.
This action, according to a gazette of the federal government, is to strengthen the Nigerian financial sector.
The revocation of licenses is a result of a thorough review and assessment of the financial health and operational efficiency of the affected microfinance and primary mortgage banks, the document said.
The CBN, as the apex regulatory body for banks in Nigeria, is entrusted with the responsibility of ensuring the stability and soundness of the financial system.
The revocation of licenses can be attributed to various factors, including non-compliance with regulatory guidelines, inadequate capitalization, weak corporate governance practices, and persistent financial distress.
Upon revocation, these institutions lose their operational status and are no longer authorized to engage in banking activities. They must cease operations, and their assets and liabilities are transferred to a designated financial institution or bridge bank.
For depositors, the revocation raises concerns about the safety of their funds. However, the CBN has implemented measures to protect depositors’ interests.
The Nigeria Deposit Insurance Corporation (NDIC), an independent agency established to protect depositors’ funds, will oversee the seamless transfer of deposits and ensure minimal disruption to customers’ access to their funds.
Other banks operating in the sector will likely face increased scrutiny and stricter regulatory oversight to ensure their adherence to guidelines.