CBN Threatens Sanctions on Financial Institutions Over Late Regulatory Returns

CBN Threatens Sanctions on Financial Institutions Over Late Regulatory Returns

The Central Bank of Nigeria (CBN) has issued a stern warning to development finance institutions (DFIs), primary mortgage banks (PMBs), and microfinance banks (MFBs) in the country regarding late submission of regulatory returns through the Financial Institutions Returns Automation (FinA) application.

In separate letters dated March 5, 2024, addressed to the institutions, the apex bank expressed strong disapproval of the delay in submitting returns on the FinA system, an offsite surveillance automation platform for online return submission by financial institutions to the CBN.

Citing Section 24 of the 2020 Banks and Other Financial Institutions Act, the CBN threatened to impose sanctions on MFBs, PMBs, and DFIs that fail to submit their returns before the 5th day of each month.

Signed by the Director of Financial Policy and Regulation, Valentine Ururuka, the letters emphasized the importance of timely submission of regulatory returns and reminded the institutions of the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020, and other relevant regulations.

The letters read, “The Central Bank of Nigeria has observed with dismay the late and non-rendition of periodic returns on FinA by Microfinance Banks (MFBs), Development Finance Institutions (DFIs), and Primary Mortgage Banks (PMBs). All MFBs, DFIs, and PMBs are therefore reminded of the provisions of Section 24 of the BOFIA 2020, and other extant regulations on timely rendition of regulatory returns.”

Furthermore, the CBN instructed all MFBs, DFIs, and PMBs to ensure that their monthly FinA returns are submitted on or before the 5th day after the end of each month, with provisions for submission on the previous workday if the 5th day falls on a weekend or public holiday.

The institutions were strongly advised to comply with the directive to avoid future breaches and subsequent sanctions.

This recent directive comes after CBN’s revocation of the operating licenses of 132 MFBs, three finance companies, and four PMBs on May 24, 2023. The revocation was attributed to the institutions’ prolonged default in submitting returns, indicating severe operational challenges.

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