The Central Bank of Nigeria, CBN, has revoked the operating licences of 46 microfinance banks across the country for failing to comply with regulatory requirements.

The apex bank announced the decision in a statement issued on Wednesday by its Acting Director of Corporate Communications, Hakama Sidi-Ali, stating that the revocation takes immediate effect.

According to the CBN, the action was taken in line with its powers under Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA), 2020.

The bank explained that the affected microfinance banks failed to meet the conditions required to continue operating as licensed financial institutions.

The CBN said the decision followed the identification of one or more regulatory infractions, including insufficient assets to meet liabilities, closure of operations without the approval of the apex bank, prolonged inactivity and cessation of financial intermediation, failure to commence business within 12 months of receiving a licence, and failure to maintain the required minimum capital unimpaired by losses.

Explaining the rationale behind the move, the apex bank stated:

“The revocation of the licences is part of the bank’s ongoing efforts to safeguard the stability of the financial sector, protect depositors, and ensure that licensed institutions comply with current laws and regulatory requirements.

“The Central Bank of Nigeria remains committed to promoting a safe, sound and resilient financial system and will continue to take appropriate supervisory and regulatory actions, where necessary, to maintain public confidence in the Nigerian financial system,” the statement said.