CBN releases guidelines for banks looking to convert, re-categorize licenses
The Central Bank of Nigeria (CBN) has released a new guideline for financial institutions interested in converting or re-categorizing their licenses.
In recent months, Zenith, Access, First Bank, FCMB, and GTB are some of the financial institutions that have transitioned to holding companies.
Also, there are reports that many fintech companies are pushing towards becoming full-fledged digital banks, offering microfinance services.
To manage this trend, the CBN has issued new draft guidelines in a circular titled ‘FPR/DIR/PUB/CIR/001/072’ and dated 28th March 2023.
The circular signed by Chibuzo Efobi, Director of the Financial Policy and Regulation Department said the guidelines were drafted due to increasing requests from financial institutions to either upgrade or convert to other license regimes with the aim to provide clarity to eligible financial institutions on regulatory requirements.
The regulator noted that the guidelines were applicable to commercial banks, Merchant Banks, Non-interest Banks, Microfinance Banks, Primary Mortgage Banks, Payment Service Banks, and any other institution the CBN may designate from time to time.
Read also:NLC suspends planned strike, picketing of CBN over naira scarcity
Part of the circular reads: “Under these Guidelines, the following prohibitions/restrictions shall apply to eligible banks and OFIs applying for conversion or re-categorization.
“The bank or OFI shall not, pending when the application is determined: expand or reduce its current banking network; roll-out new products and services; carry out any new strategic banking activity but the settlement of rights and obligations shall continue until extinguished in accordance with existing terms and conditions;
“Take any business decision after the conversion process has commenced, except in line with the bank’s conversion strategy submitted to the CBN; engage in any banking activity specific to the proposed new license; any other requirement that may be prescribed from time to time by the CBN.”
Join the conversation
Support Ripples Nigeria, hold up solutions journalism
Balanced, fearless journalism driven by data comes at huge financial costs.
As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.
If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.
Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.
A tale of Kwara public school where pupils learn under the tree without chalkboards
“You cannot make people learn. You can only provide the right conditions for learning to happen.” – Vince Gowmon But...
SPECIAL REPORT: Indiscriminate waste dumps, open defecation pose threat of epidemic in Kwara as govt slow to act
Forty three-year-old Bilikis Abdulrahman covered her pineapple fruit she is selling inside a white bucket container. This, she does to...
SPECIAL REPORT: Women displaced by conflict in North-Central Nigeria become farm helps to survive
Displaced women finding refuge in Abagena camp for Internally Displaced Persons (IDP) camp in Makurdi, Benue State have resorted to...
FEATURE: Kwara residents cry out for help as rainstorm devastates their homes
Phillip Moffitt, an American author, said: “the house is a home when it shelters the body and comforts the soul”,...
SPECIAL REPORT: Small businesses suffer, as govts fail to end sit-at-home in Nigeria’s South-East
It is a Thursday afternoon in December 2022 and the sun is scorching inside the popular Ogbete Market in Enugu...