CBN withdraws licences of 46 microfinance banks over regulatory breaches

The Central Bank of Nigeria (CBN) has revoked the operating licences of 46 microfinance banks across the country, citing their failure to comply with regulatory requirements necessary for continued operation.

The revocation, which took effect on July 1, was announced in a statement issued by the apex bank on Wednesday.

According to the CBN, the decision was taken by its Governor, Olayemi Cardoso, in line with the powers conferred on the bank under Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA), 2020.

The apex bank said the affected institutions failed to meet the conditions required to retain their licences, making regulatory intervention necessary.

It explained that the action followed one or more violations of prudential and operational standards governing microfinance banks.

Among the reasons cited for the licence withdrawals were inadequate assets to cover liabilities, closure of business operations without obtaining the approval of the CBN, and prolonged inactivity resulting in the cessation of financial intermediation.

Other infractions included failure to commence operations within 12 months after receiving regulatory approval and failure to maintain the statutory minimum capital base required for licensed financial institutions.

The CBN said the measure forms part of its broader strategy to strengthen oversight of the financial system and ensure that all licensed institutions operate in compliance with existing laws and regulatory standards.

“The revocation of the licences is part of the Bank’s ongoing efforts to safeguard the stability of the financial sector, protect depositors, and ensure that licensed institutions comply with current laws and regulatory requirements,” the statement said.

The apex bank reaffirmed its commitment to maintaining a safe, sound and resilient financial system through effective supervision and timely enforcement actions where necessary.

“The Central Bank of Nigeria remains committed to promoting a safe, sound, and resilient financial system and will continue to take appropriate supervisory and regulatory actions, where necessary, to maintain public confidence in the Nigerian financial system,” it added.

The latest action underscores the CBN’s intensified regulatory drive aimed at improving corporate governance, strengthening risk management practices, enhancing regulatory compliance and preserving financial system stability across the banking sector.