CBN Releases Exposure Guidelines For Banks Seeking Change Of Operating License
Photo Credit: Nigerian Tribune
The Central Bank of Nigeria (CBN) has released an exposure draft of the guidelines for change of operating license for banks and other financial institutions (OFIs).
In a circular signed by the apex bank’s director of financial policy and regulation, Chibuzo Efobi, the draft guidelines are aimed at providing clarity on the requirements of change of the various license types for banks and OFIs.
According to The Blueprint, the Banks and Other Financial Institutions Act 2020 (BOFIA), by virtue of section 5, empowers the Central Bank of Nigeria (CBN), to amongst others, vary the requirements of various licensing regimes,” the circular reads.
“Consequently, due to increasing requests from financial institutions to either upgrade or convert to other license regimes, this draft guidelines aims to provide clarity to eligible financial institutions on regulatory requirements.
“This exposure draft guidelines can be accessed on our website www.cbn.gov.ng and comments/input should be addressed to the Director, Financial Policy and Regulation Department with soft copies to fprd_cedg@cbn.gov.ng within three (3) weeks from the date of this circular.”
According to the guidelines, any eligible bank or OFI applying for conversion or recategorisation are prohibited from expanding or reducing its current banking network, pending when the application is determined.
The apex bank also said such financial institutions must not roll out new products and services, carry out any new strategic banking activity, take any business decision after the conversion process has commenced except in line with the bank’s conversion strategy submitted to the CBN.
They are also not allowed to engage in any banking activity specific to the proposed new license.
