In its new draft guidelines, the Central Bank of Nigeria prohibits banks and other financial institutions seeking a conversion licence from growing or contracting their existing banking network.
The CBN reveals this in a circular to banks and other financial institutions titled ‘Regulatory guidelines for change of operational licence for banks and other financial institutions in Nigeria’ and dated 28 March 2023.
Chibuzor Efobi, Director, Financial Policy and Regulation Department, approved the draft.
According to the circular, “the following prohibitions/restrictions shall apply to eligible banks and OFIs applying for conversion or re-categorisation under these guidelines.” Until the application is determined, the bank or OFI shall not expand or reduce its existing banking network.
“Roll out new products and services; conduct any new strategic banking activity, but rights and obligations shall continue until extinguished in accordance with existing terms and conditions.”
“Make any business decisions after the conversion process has begun, except in accordance with the bank’s conversion strategy submitted to the CBN; Engage in any banking activity specific to the proposed new licence; and any other requirement that the CBN may prescribe from time to time.”
The CBN stated that the draft guidelines intended to provide clarity on regulatory requirements to eligible financial institutions due to an increase in requests from financial institutions to either upgrade or convert to other license regimes.
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