The Central Bank of Nigeria (CBN) has announced that it will not entertain extension of deadline or accept any appeal for a waiver, or reduction of penalty for Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs) that fail to meet up with their recapitalisation this month.
The CBN in a circular released on Thursday reminded all directors and shareholders of all microfinance banks on the December 31, 2012 deadline for compliance with the Revised Microfinance Policy Framework (RMPF), particularly in respect of the capital requirements for each category of MFBs and existing branches/cash centres.
The apex bank had in August 2011 directed the MFBs to increase their capitalisation depending on the category they belong. A unit MFB licence is expected to recapitalise to N20 million, national MFBs, N2 billion and state MFBs, N100 million. The national PMBs are expected to have N5 billion, and state PMBs are to have N2.5 billion.
According to the CBN, all MFBs that have elected to remain a unit MFB, as indicated in the compliance plans earlier submitted to the CBN, are required to close any existing branches/cash centres subject to prior approval of the apex bank 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.
Part of the circular signed by O.A. Fabamwo, director, other financial institutions supervision department, reads: “For the avoidance of doubt, all ‘customer interaction centres’, ‘meeting points’ and ‘customer service centres’, or similar outlets, once located outside the registered business premises of a unit MFB shall be regarded as unauthorised/unapproved branches/cash centres.
“All previous approvals for such outlets for unit MFBs have become null and void from the date of approval of the Revised Policy Framework by the board of directors of the CBN”.
It is also pertinent to remind you that the penalty 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 is N250,000 per branch for a unit MFB, N500,000 per branch for a state MFB and N1,000,000 per branch for a national MFB”.
Furthermore, the CBN said such unapproved branches/cash centres shall be closed within thirty (30) days. “Failure to close an unapproved branch or cash centre, shall attract a fine of N5,000 for each day of default, irrespective of the category of MFB. Moreover, failure to comply with any directive issued by the CBN, as stipulated in Section 19(i) of the revised guidelines for MFBs, is a ground for revocation of licence”.