CBN Prevents Banks Seeking Upgrades From News in Nigeria-Business

The Central Bank of Nigeria’s new draft guidelines prohibit banks and other financial organizations applying for conversion licenses from increasing or decreasing their current banking network.

This information is provided by the CBN in a circular addressed to banks and other financial institutions with the reference number “FPR/DIR/PUB/CIR/001/072” that is titled “Regulatory guidelines for change of operational license for banks and other financial institutions in Nigeria” and is dated March 28, 2023.

Director of the Financial Policy and Regulation Department Chibuzor Efobi signed the proposal.

“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 to expand or reduce its current banking network; The circular stated.

“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 was 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.”

The CBN claimed that the draft guidelines aimed to give qualified financial institutions more clarity on regulatory requirements due to the growing number of requests from financial institutions to either upgrade or convert to other license regimes.

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