The Central Bank of Nigeria (CBN) has threatened stringent sanctions against microfinance banks that violate the conditions of their operating license by carrying out foreign currency-related transactions. The apex bank issued the warning in a recent circular, threatening to revoke the operating license of any microfinance bank caught performing forex transactions.
“The CBN will continue to monitor developments in the Microfinance Banking (MFB) sector and apply severe regulatory sanctions for breaches of regulations, including revoking the licence of non-compliant microfinance banks,” the bank said.
The CBN says MFBs have low capitalization which if they perform such transactions will threaten the stability of the financial system.
Nigeria’s apex bank has announced new policies to help impact the naira's exchange rate, most recent was the ban on Bureau De Change operators from the sales of forex, however, the naira’s exchange rate still plunges on the parallel market, going as low as $1 for N525.
