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CBN Reads Riot Act to MFBs, PMBs

21 Dec 2012

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CBN Governor, Sanusi Lamido Sanusi

Obinna Chima

The Central Bank of Nigeria (CBN) Thursday advised Microfinance Banks (MFBs) to adhere to the 31st December, 2012 deadline set aside for the compliance with the Revised Microfinance Policy Framework, saying that appeal for waiver, or reduction of penalty will not be entertained.

This came just as the banking sector regulator also urged operators of Primary Mortgage Banks (PMBs) to conclude the process for their recapitalisation on or before 30th April, 2013.

Director, Other Financial Institutions Supervision Department, CBN, Mr.O.A. Fabamwo, stated these in two separate circulars posted on the apex bank’s website.
The CBN in the circular to MFB operators titled: “Re: Circular on the Revised Microfinance Policy Regulation and Supervisory Framework for Nigeria,” said:

“This is a reminder to all directors and shareholders of all MFBs on the deadline of 31st December, 2012 for compliance with the Revised Microfinance Policy Framework, particularly in respect of the capital requirements for each category of MFB and existing branches/cash centres, etc.
“As you are well aware, all MFBs that have elected to remain Unit MFBs, as indicated in the compliance plans earlier submitted to the CBN, are required to close any existing branches/cash centres, etc, subject to prior approval of the CBN in writing and adequate notification to existing customers, who should be advised to migrate their accounts to the MFB’s Head Office, while dissenting customers should be settled.”

It is also stated the penalties for operating a branch/cash centre without prior approval of the CBN as stipulated in Section 13.1(b) of the Revised Guidelines for MFBs.

On the other hand, in another circular addressed to PMBs titled: “Re: Circular on Compliance with the Revised Guidelines for PMBs,” the regulator said: “This serves as a reminder to all directors and shareholders of all PMBs on the impending deadline of 30th April, 2013 for compliance with the Revised Guidelines for PMBs and provides additional information and guidance to all affected PMBs.

“Specifically, this is to remind all affected PMBs of the available options to meet the prescribed capital requirements of N5 billion for national PMBs and N2.5 billion for State PMBs and the documentation requirements to obtain regulatory approval for each option.”

It however listed capital raising, rights issue, private placement, public offer, business combination, mergers and acquisition, takeover and downscaling as some of the options available to the operators.

“In choosing or implementing any of the options, PMBs are advised to conduct due diligence and seek professional legal and financial advice. For the avoidance of doubt, all processes must be concluded on or before 30th April, 2013, as there will be no extension of time,” it added.

Tags: Business, Nigeria, Featured, CBN, MFBs, PMBs

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