The Central Bank of Nigeria, CBN, has rolled out Regulatory Guidelines to guide banks and Other Financial Institutions (OFIs) interested in the conversion or re-categorization of their licenses.
In a circular signed by Director, Financial Policy and Regulation Department, CBN, Mr. Chibuzo Efobi, the apex bank said the guidelines were drafted due to increasing requests from financial institutions to either upgrade or convert to other license regimes with the aim to provide clarity to eligible financial institutions on regulatory requirements.
The regulator noted that the guidelines were applicable to commercial banks, Merchant Banks, Non-interest Banks, Microfinance Banks, Primary Mortgage Banks, Payment Service Banks, and any other institution the CBN may designate from time to time.
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According to the circular, “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: expand or reduce its current banking network; 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 has 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.”