In a circular that was issued by CBN’s Ibrahim Tukur on behalf of the director for financial policy and regulation department instructed the banks to send in details of the accounts.ADVERTISEMENT
“The Central Bank of Nigeria has observed the activities of some Microfinance Banks that have gone beyond the remit of their operating licenses by engaging in non permissible activities especially wholesale banking, foreign exchange transactions and others. “Given the comparatively low capitalization of MFBs, dealing in wholesale and/or foreign exchange transactions are a significant msk with dire consequences for financial system stability. It has therefore become imperative to remind all MFBs to strictly comply with the extant Revised Regulatory and Supervisory Guidelines for Microfinance Banks in Nigeria 2012 ,” the circular stated.
The CBN said for the avoidance of doubt and consistent with the permissible activities of specialized micro institutions are strictly prohibited from foreign exchange transactions, focus on providing financial services to retail and/or micro-clients; micro credit and retail transactions carried out by MFBs are limited to N500,000 per transaction for Tier 2 Unit, among other provisions.
The circular added that CBN will continue to monitor developments in the MFB sector and apply severe regulatory sanctions for breaches of extant regulations, including revoking the license of non-compliant MEBs.
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