The Central Bank of Nigeria (CBN) has revoked the operating licences of two troubled primary mortgage banks, Aso Savings and Loans Plc and Union Homes Savings and Loans Plc, due to ongoing violations of banking regulations and severe financial weaknesses.
In a statement released on Tuesday, signed by Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, the apex bank explained that the revocation was executed under its powers in Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020 and Section 7.3 of the Revised Guidelines for Mortgage Banks in Nigeria.
The decision forms part of the CBN's efforts to restructure the mortgage banking sub-sector and enforce stricter compliance with laws and prudential standards.Key breaches cited by the regulator include:
- Failure to maintain the minimum paid-up share capital required for their licence category.
- Insufficient assets to cover liabilities.
- Critical undercapitalisation, with capital adequacy ratios far below the required minimum.
- Non-adherence to multiple regulatory directives and obligations.
The CBN reiterated its dedication to financial system stability, stating: "The CBN remains committed to its core mandate of ensuring financial system stability."
Both institutions have been plagued by long-term issues, including depositor complaints about trapped funds, allegations of poor corporate governance, and their delisting from the Nigerian Exchange (NGX) in 2024 for failing to file audited financial statements for over six years.
With the licences revoked, Aso Savings and Union Homes can no longer function as licensed financial institutions.
The Nigeria Deposit Insurance Corporation (NDIC) is expected to handle the liquidation process, and depositors are urged to follow official updates from the CBN or NDIC regarding claims and resolutions.
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