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The Central Bank of Nigeria has said it will sanction banks assisting the operations of unlicensed foreign firms.
It stated on Monday in its ‘Guidelines for the regulation of representative offices of foreign banks in Nigeria’, signed by the Director, Financial Policy and Regulation Department, Muhammad Musa.
‘Any CBN regulated entity found to be assisting, supporting, harboring or facilitating the presence and/or operations of an unlicensed international financial institution in Nigeria shall be liable to severe sanctions including suspension or revocation of their banking licence,” it stated.
According to the guidelines, representative offices of foreign banks served an important purpose of showcasing the brand and services of its parent company.
It could also stimulate foreign direct investment to the host country by connecting capital to various investment opportunities.
“It is in view of these that the Central Bank of Nigeria issues this guideline, to specify the requirements for the licensing and operations of approved representative offices of foreign banks in Nigeria,” it stated.
The CBN noted that the guidelines applied to banks licensed under any foreign law, whose registered head office is outside Nigeria; Any financial institution licensed under foreign law, whose primary business includes the receipt of deposits, granting of loans and/or provision of current and savings accounts; Any foreign-owned operating bank/financial holding company that is foreign-based, that owns controlling interest in one or more banks or institutions whose primary business includes the receipt of deposits, granting of loans and provision of current and savings accounts.