According to a Vanguard News Online article, the Central Bank of Nigeria (CBN) has decided to revoke the operating licenses of a number of illiquid microfinance banks [1,2].This revelation is based on information from an anonymous CBN source who claims that letters regarding the decision were forwarded to the affected banks [1]. The letters direct each bank to stop taking deposits and disbursing loans until it can either recapitalize or merge with another bank by an unspecified date in January of 2010 [1]. The CBN source also claims that the bank plans to release the names of the microfinance banks in early 2010 [1]. The Nigerian Deposits Insurance Corporation (NDIC) will reimburse insured depositors from the affected banks [1].

By Christopher Maggio, Research Assistant

About:
The Central Bank of Nigeria (CBN)

Description:
Some of the regulatory objectives of the Central Bank of Nigeria (CBN) are as follows: to issue legal tender, to maintain the external reserves of the country, to promote monetary stability and a sound financial environment, and to act as a banker of last resort and financial adviser to the federal government.

MicroCapital’s Microfinance Universe profile: CBN

Bibliography:
[1] Vanguard News Online article entitled ‘CBN to revoke licenses of distressed microfinance banks’: http://www.vanguardngr.com/2009/12/28/cbn-to-revoke-licenses-of-distressed-microfinance-banks-2/
[2] Central Bank of Nigeria: http://www.cenbank.org/