Focused on enforcing financial integrity and ensuring strict observance of legal and regulatory requirements, the Central Bank of Nigeria (CBN) has revoked the operating licenses of two mortgage banks for gross violation of various Sections of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria.
The affected financial institutions are: Aso Savings and Loans Plc and Union Homes Savings and Loans Plc.
A circular issued on Tuesday and signed by CBN’s Acting Director, Corporate Communications Department, Hakama Ali, noted that the move was part of efforts to reposition the mortgage sub-sector and promote a culture of compliance with relevant laws and regulations.
Citing Section 12 of BOFIA 2020 and Section 7.3 of the Revised Guidelines for Mortgage Banks in Nigeria, which allows it to exercise its powers, the CBN said, “The affected institutions had violated various Sections of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria, including: failure to meet the minimum paid-up share capital requirement for the category of the bank licence granted to them by the CBN, and having insufficient assets to meet their liabilities.”
Among other violated guidelines are being critically undercapitalised with a capital adequacy ratio below the prudential minimum ratio as prescribed by the CBN, and failure to comply with several directives and obligations imposed upon them by the CBN.
Accordingly, the circular said: “The CBN remains committed to its core mandate of ensuring financial system stability.”
