Citing the need, “to promote spread and balance of regional banks across the country”, the Central Bank of Nigeria (CBN) yesterday announced that it has expanded the financial institutions’ scope of operations from a minimum of two geopolitical zones of the Federation, to three. In circular to all regional banks, dated June 26, 2020, the apex bank said the lenders have period of six months to ensure that they establish, “operational footprint” at the additional geo-political zone.
The circular, which was signed by the Director of Financial Policy and Regulation Department at the CBN, Kevin Amugo, reads in part: “Effective the date of this circular, all banks with regional authorization shall be required to operate from one additional geo political zone as may be prescribed for each institution by the CBN, without prejudice to the existing requirement of minimum of two(2) geo-political zones of the federation. The essence is to promote spread and balance of regional banks across the country.”
In the wake of the repeal of universal banking guidelines, the CBN had unveiled new licensing conditions for commercial banks in the country. Under the new structure, the regulator stated that a commercial bank with regional banking authorisation will be entitled to carry on its banking business operations within a “minimum of five and a maximum of 10 contiguous states, lying within not more than two (2) Geo-Political Zones of the Federation, as well as within the Federal Capital Territory.”
For a commercial lender with national banking authorization, the CBN said such financial institutions will be entitled to carry on banking business operations within every State of the Federation. It also said that lenders with international banking authorization, were entitled to carry on banking business operations within all the States of the Federation, as well as to establish and maintain offshore banking operations in jurisdictions of their choice.