CBN Unveils Rules for New Banking Licences

The Central Bank of Nigeria unveiled a new framework for ownership of commercial banks in the country.

The framework by the CBN seeks to open the country’s economy to become a financial hub in the world by the year 2020.

The new framework, however, said that foreign investors seeking to establish a bank should not be companies incorporated in offshore centres or tax havens such as Gibraltar and The Cayman Islands among others.

For an investor to obtain Approval in Principle, the CBN said such an investor needed to make a formal application for a licence to carry on the business of banking in Nigeria.

According to the CBN, the application must be submitted with a non-refundable application fee of N500,000.

The CBN said the application must be accompanied by a minimum capital deposit of N25bn with the CBN on application with evidence of deposit by each shareholder.

"The source of capital contribution by each shareholder/subscriber would subsequently be verified by bank examiners," the guidelines said.

The new guidelines also require that promoters of the new bank must state clearly in their feasibility report the sources of capital contribution from each investor.

It said fitness and appropriateness of the promoters would be ascertained through security screening and status enquiry from the Securities and Exchange Commission, Nigerian Deposit Insurance Corporation, National Insurance Commission, Credit Bureau and reference to CBN’s black book maintained by the Bankers Committee.

It also said that the promoters of the new financial firm must sign an undertaking that the bank would be adequately capitalised for the volume and character of its business at all times.

Besides, the investors are to provide a five year financial projection.