The Central Bank of Nigeria (CBN) has revoked the operational licenses of two primary mortgage banks, Aso Savings and Loans Plc and Union Homes Savings and Loans Plc, citing multiple regulatory violations and financial distress. According to a statement issued by the CBN’s Acting Director of Corporate Communications, the action was taken under the Banks and Other Financial Institutions Act (BOFIA) 2020 and the Revised Guidelines for Mortgage Banks in Nigeria.
The CBN stated that the affected institutions had breached various provisions, including failure to meet the minimum paid-up share capital requirement for their license category. This move is part of broader efforts to reposition the mortgage sub-sector and enforce compliance with laws and regulations. The apex bank remains committed to ensuring financial system stability and has advised depositors and stakeholders to monitor further announcements regarding potential liquidation or resolution processes.
The revocation of the licenses means that both Aso Savings and Union Homes can no longer operate as licensed financial institutions. The CBN’s decision is aimed at maintaining the integrity and stability of the financial system, and the regulator will continue to monitor the situation to ensure that all stakeholders are protected. The Nigeria Deposit Insurance Corporation (NDIC) is also expected to play a role in the resolution process.
The CBN’s action is a significant development in the country’s financial sector, highlighting the regulator’s commitment to enforcing compliance with laws and regulations. The mortgage sub-sector is a critical component of the financial system, and the CBN’s efforts to reposition it are aimed at promoting stability and growth. As the situation unfolds, depositors and stakeholders will be watching closely to see how the CBN and NDIC handle the liquidation or resolution processes.
The CBN’s decision to revoke the licenses of Aso Savings and Union Homes is a reminder of the importance of regulatory compliance in the financial sector. The apex bank’s commitment to ensuring financial system stability is crucial for maintaining investor confidence and promoting economic growth. As the financial sector continues to evolve, the CBN’s role in regulating and supervising financial institutions will remain critical in maintaining stability and promoting development.
