Page Nav

SHOW

Grid

GRID_STYLE

HOT NIGERIAN NEWS !!!

latest

CBN to sanction microfinance banks over forex transactions

  The Central Bank of Nigeria has threatened to sanction microfinance banks going beyond the mandate of their operating licence to engage in...

 

The Central Bank of Nigeria has threatened to sanction microfinance banks going beyond the mandate of their operating licence to engage in foreign exchange transactions.

 

The regulator said some microfinance banks have engaged in wholesale banking, foreign exchange transactions and others.

 

This is coming after CBN in July stopped supplying Bureaux De Change operators forex saying they are “agents that facilitate graft and corruption in the country”. The CBN now supplies forex to commercial banks for sales to individuals and businesses.

 

The apex bank in a circular to all the MFBs Thursday, signed by an official at the Financial Policy and Regulatory Department, Ibrahim Tukur, said certain operations by microfinance banks pose a huge risk to the stability of the financial system.

 

“Given the comparatively low capitalization of MFBs, dealing in wholesale and or foreign exchange transactions are a significant risk with dire consequences for financial stability,” it said.

 

“It has therefore become imperative to remind all MFBs to strictly comply with the extant revised regulatory and supervisory guidelines for microfinance banks in Nigeria 2012.”

The bank threatened to revoke the licence of any MFBs that fails to comply.

 

The circular stated that the MFBs are prohibited from foreign exchange transactions and must primarily focus on providing financial services to retail and/or micro- clients .

 

The apex also stated that micro-credit and retail transactions carried out by MFBs were limited to N500,000 per transaction for Tier 2 Unit MFB and N1 million for other categories.

 

According to the circular, the micro-credit facilities should constitute a minimum of 80 per cent of total loans for MFBs.


No comments

Latest Nigerian News
Comments are Moderated. Clean Comments will be swiftly approved. No swear words, no racism, allowed.

Visits Devices Code Obs Start: 2021-06-01 End: 2021-06-30