Revealed! Only 47 MFBs were recommended for license revocation
Oct 18, 2010; Babajide Komolafe
The joint examination of the Central Bank of Nigeria (CBN) and the Nigeria Insurance Corporation (NDIC) on microfinance banks recommended the revocation of the licenses of just 47 banks.
On September 24, the CBN revoked the licenses of 224 microfinance banks but two weeks later returned the licenses of 36 of the banks. Vanguard investigation, however, reveals that 47 MFB’s were actually pencilled down for the revocation of their licenses while 174 were recommended to be directed to recapitalise.
It was gathered that some highly placed officials in the regulatory body however insisted that the number of MFBs recommended for revocation was too small given the extent of rot in the sub-sector.
They argued that there is need to hit the sub-sector hard so as to send a strong signal to the remaining ones. A top official in one of the regulatory bodies, who pleaded anonymity, confirmed this to Vanguard. “47 MFB’s were initially supposed to be closed while 174 were to be asked to recapitalise, but the powers-that-be demanded that they be hit hard.”
Speaking further, the official said beyond this, “Some were erroneously included while some had injected capital between the time of the target examination and the closure. But some capital injected by the MFBs was not brought to our notice while some were not taken cognizance of by us”.
Last week, Vanguard exclusively reported that the CBN has returned the licenses of about 33 of the 224 MFBs whose licenses were revoked. Vanguard investigations revealed that as at last week, the apex bank had returned 36 licences and might return more licenses.