CBN threatens micro-finance banks over monthly returns

Gbola Subair, Abuja - 14.02.2008

TOUGH time awaits the newly approved microfinance banks in the country as the Central Bank of Nigeria (CBN) has threatened them with closure if they fail to render monthly return to the regulatory authorities in the banking sector.

The CBN, in a circular issued by the Director, Other Financial Institution Department (OFID), Mr. S.A Oni, warned all the micro-finance banks that had been licensed and those given approval in principle to operate not to contravene Section 58(2)(b) of Banks and Other Financial Institution Acts(BOFIA)1991 (as amended) and Section 64 of the Regulatory and Supervisory Guidelines for Microfinance Banks in Nigeria by ensuring that they render monthly return as at when due.

Handing out a final warning to micro-finance banks which failed to render returns, the apex bank disclosed that failure to either submit monthly returns to the CBN or the Nigeria Deposit Insurance Corporation (NDIC) or late submission, which is not later than 14 days after the end of the relevant month, was unacceptable.

The apex bank also said erring micro-finance bank would be sanctioned which might be in form of revocation of operating license as prescribed in Section 8.2 of the Regulatory and Supervisory Guidelines for Micro-finance Banks in Nigeria.