CBN Withdraws Licenses Of Two Banks For Lacking Operational Viability

By Suleiman Anyalewechi

The Central Bank of Nigeria, CBN, has revoked the operating  licenses of two mortgage financial institutions- the Union Homes Savings and Loan PLC ,and Aso Savings and Loans PLC .

The apex bank informed that the move is in alignment with its commitment towards strengthening the sector ,as well as sustaining  public trust and  confidence in the industry.

A statement from  CBN’s Acting Director of Corporate Communications, Hakama Ali, said that the action against the two banks resulted from their serial violations of the provisions of the Banks and Other Financial Institutions Act BOFIA 2020 .

Specifically, the financial regulatory body, noted that the affected financial institution, over time failed to measure up to certain critical industry requirements, including the maintenance of  minimum share capital ,and enough assets to cover their liabilities.

This is in addition to both banks being seriously undercapitalized with their cumulative capital adequacy ratio far below the official industry  benchmark

According to Mrs AIi ,the apex regulatory financial institution was left with no other choice than to intervene ,after the two banks failed to comply with several warning notices and directives aimed at salvaging the unfortunate situation.

The Acting spokesperson emphasized that the decision to shut down their operations was taken in order to safeguard depositors’ funds and the integrity of the industry.