FDI: CBN to sanction commercial banks supporting unlicensed foreign firms

*The Central Bank of Nigeria any officials of the commercial banks found wanting in backing an unlicensed financial institution in the country shall be liable to sanctions, including suspension and revocation of their bank licence

Isola Moses | ConsumerConnect

In line its banking sector regulation, the Central Bank of Nigeria (CBN) Nigerian has cautioned the Deposit Money Banks (DMBs) against harbouring and supporting unlicensed foreign firms in the economy.

ConsumerConnect reports the Bankers’ Bank, Monday, May 8, 2023, issued this warning via its “Guidelines for the Regulation of Representative Offices of foreign Banks in Nigeria”.

Muhammad Musa, Director of Financial Policy and Regulation Department, in the document, stated that banking officials found wanting in backing an unlicensed financial institution in the country shall be liable to sanctions, including suspension and revocation of their bank licence.

It was learnt the latest regulatory measures are coming against the backdrop of the Bank’s effort at boosting Foreign Direct Investment in Nigeria.

CBN’s latest directive is in line with its mandate outlined under Sections 6(1) and 8(1) of the Banks and Other Financial Institutions Act 2020(BOFIA).

The provision noted “no foreign bank shall operate in Nigeria without prior approval of the CBN.”

According to data from the CBN, Foreign Direct Investment in Nigeria increased by 752.71 USD Million in the Fourth Quarter (Q4) of 2022.