The Sun News On-line|Money Market

Central Bank of Nigeria (CBN) Governor, Professor Chukwuma Soludo, on Friday read riot act to chief executives of Microfinance Banks (MFBs) threatening to remove or blacklist them if they fail to render returns for a period of six months consecutively.

The governor, who was addressing the inaugural meeting of the committee of Microfinance Banks in Nigeria (COMBIN) in Abuja, insisted that persistent failure/refusal to render returns for a period of six months consecutively, or six times within a period of 12 months, shall be a good reason to revoke the licence of an MFB.

According to him, all MFBs are required to submit monthly returns, reach the Director, Other Financial Institutions Department of the NDIC, not later than 10 working days after the end of the relevant month.

Also, audited financial statements and the abridged version should be submitted for CBN approval not later than four months after the end of the financial year. Besides, MFBs play down the word "microfinance" in their approved names in order to disguise the subsector in which they have been licensed to operate, saying that the unwholesome action was capable of generating unnecessary confusion in the market.

To this effect, he said, all microfinance banks were required to ensure that their official name as approved by the CBN and registered at Corporate Affairs Commission (CAC) is on their signboards, letter-headed paper, all banking instruments, branded documents and sinages in the same font style and size.

"All sign-boards, letter-headed papers, banking instruments, branded documents and signages which do not conform to this specification should be replaced immediately. Furthermore, a copy of the CBN licence of all MFBs should be glazed and displayed in a conspicuous location within the banking hall at the Head Office and all approved branches of all MFBs with immediate effect. The MD/CEO of any MFB that fails to comply with these directives shall be removed and blacklisted, while the MFB is at the risk of revocation of its licence, pursuant to Section i 2( e) of the Bank and other Financial Institutions Act (BOFIA), 1991(as amended)" he said.