Market News

The Central Bank of Nigeria has barred banks and other financial institutions seeking a conversion licence from expanding or reducing their current banking network in its new draft guidelines.

The CBN discloses this in a circular tagged ‘FPR/DIR/PUB/CIR/001/072’ to banks and other financial institutions, which was titled ‘Regulatory guidelines for change of operational licence for banks and other financial institutions in Nigeria’, and dated 28 March 2023.

The draft was signed by the Director, Financial Policy and Regulation Department, Chibuzor Efobi.

The circular stated, “Under these guidelines, the following prohibitions/restrictions shall apply to eligible banks and OFIs applying for conversion or re-categorisation. 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 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 licence; any other requirement that may be prescribed from time to time by the CBN.”

The CBN stated that due to increasing requests from financial institutions to either upgrade or convert to other licence regimes, the draft guidelines aimed to provide clarity to eligible financial institutions on regulatory requirements.