The Central Bank of Nigeria (CBN) has sternly warned the Microfinance Banks in the Country to stop engaging in foreign exchange transactions and other unauthorized dealings.
Ibrahim Tukur from CBN’s Financial Policy and Regulation Department in a statement which was titled ‘Cessation of Non-Permissible Activities by Microfinance Banks’ said;
“The Central Bank of Nigeria (CBN) has observed the activities of some Microfinance Banks (MFBs) 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 risk 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 Guidelines).
“The 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 MFBs (in line with Section 19 of the Guidelines).”