145 Community Banks fail as CBN demands statutory returns
The community banks according to the CBN, were discovered to have closed shop and consequently, are to be liquidated. It would be recalled that the federal government launched the micro finance and regulatory policy for Nigeria on December 15, 2005.
The new policy created two categories of micro finance banks - MFBs licenced to operate as unit banks and MFBs licenced to operate within the four walls in a state. Community banks were therefore given 24 months to recapitalise and convert to MFBs in line with the conversion requirements of the CBN. As the deadline for conversion lapsed, and the affected CBs failed to forward the necessary statutory returns to the apex bank as earlier directed, the CBN had issued what it called "last warning "To the chairmen and directors of the failed CBs to within 21 working days from the date the first request was made, make the returns to the appropriate quarter in CBN.The returns information, which should be provided by the CBs as at the last date of their operation, should cover:
• statement of the assets and liabilities;
• comprehensive and verifiable list of depositors showing their name, addresses and the amounts in their favour;
• list of all debtors including their addresses and the amount owed to the CBs; and
• list of its assets (movable and fixed).
Out of the 750 CBs, which operated in the country hitherto now, only 407 have successfully transformed and registered by the CBN as MFBs.
Analysis on the proportion of failure by state wise in the country reveals that Ebonyi and Zamfara states recorded the least number of one each, followed by Niger, Kaduna and sokoto states having two failures each. The highest number of 14 failures each occurred in Edo and Delta states. This failure figures do not however represent equal levels in each state of the federation as there are clearly some states with less than 10 and others with more than 120 community banks prior to CBN conversion policy deadline.
Meanwhile, this last request by CBN serves as the last warning to all chairmen and directors of the affected CBs as failure to respond appropriately within the specified period shall make them liable for persecution in the court of law.
The new policy created two categories of micro finance banks - MFBs licenced to operate as unit banks and MFBs licenced to operate within the four walls in a state. Community banks were therefore given 24 months to recapitalise and convert to MFBs in line with the conversion requirements of the CBN. As the deadline for conversion lapsed, and the affected CBs failed to forward the necessary statutory returns to the apex bank as earlier directed, the CBN had issued what it called "last warning "To the chairmen and directors of the failed CBs to within 21 working days from the date the first request was made, make the returns to the appropriate quarter in CBN.The returns information, which should be provided by the CBs as at the last date of their operation, should cover:
• statement of the assets and liabilities;
• comprehensive and verifiable list of depositors showing their name, addresses and the amounts in their favour;
• list of all debtors including their addresses and the amount owed to the CBs; and
• list of its assets (movable and fixed).
Out of the 750 CBs, which operated in the country hitherto now, only 407 have successfully transformed and registered by the CBN as MFBs.
Analysis on the proportion of failure by state wise in the country reveals that Ebonyi and Zamfara states recorded the least number of one each, followed by Niger, Kaduna and sokoto states having two failures each. The highest number of 14 failures each occurred in Edo and Delta states. This failure figures do not however represent equal levels in each state of the federation as there are clearly some states with less than 10 and others with more than 120 community banks prior to CBN conversion policy deadline.
Meanwhile, this last request by CBN serves as the last warning to all chairmen and directors of the affected CBs as failure to respond appropriately within the specified period shall make them liable for persecution in the court of law.
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