CBN plans surveillance scheme for MFBs

…..Says breach of section 19 tantamount to revocation of licence.
The Central Bank of Nigeria (CBN) is set to commence a surveillance scheme for Microfinance Banks (MFBs) in the country, so as to monitor their activities.

The apex bank has also reiterated that, failure to comply with any directive issued by the regulatory body, as stipulated in Section 19(i) of the Revised Guidelines for MFBs, is a ground for revocation of licence.

This, it said  is in line with the Revised Microfinance Policy Regulatory and Supervisory Framework, to basically curtail MFBs who are flouting the requirements indicated in the compliance plans earlier submitted to the banking watchdog.

The requirement stipulates that all MFBs that have elected to remain Unit MFBs, as indicated in the compliance plans earlier submitted to the CBN, are required to close any existing branche/cash centre.

Meanwhile a close source from the apex bank told Financial Vanguard that the scheme is expected to kick off by February 2013.

It would be recalled that the Director, Other Financial Institutions Supervision Department Mr. O.A Fabamwo warned MFBs that all customer interaction centres’, meeting points, customer service centres’, or similar outlets, once located outside the registered business premises of a Unit MFB shall be regarded as unauthorized/unapproved branches/cash centres.

Fabamwo further warned that: “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. Failure to close an unapproved branch or cash centre shall attract a tine of N5, 000 for each day of default, irrespective of the category of MFB.”

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