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The Central Bank of Nigeria (CBN) on Tuesday revoked the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc.
CBN, in a statement signed by its spokesperson, Hakama Sidi Ali, said the decision was taken under Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020 and Section 7.3 of the Revised Guidelines for Mortgage Banks in Nigeria.
The apex bank said the two mortgage banks failed to meet the minimum paid-up share capital required for their licence category and did not have sufficient assets to meet their liabilities.
The regulator also claimed that the institutions’ capital adequacy ratios were below the bank’s minimum prudential requirements, indicating that they were severely undercapitalised.
It added that the banks also failed to comply with several directives and obligations issued by the CBN.
“The affected institutions had violated various Sections of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria, including: Failure to meet the minimum paid-up share capital requirement for the category of the bank licence granted to them by the CBN; Having insufficient assets to meet their liabilities,” CBN stated.
“Being critically undercapitalised with a capital adequacy ratio below the prudential minimum ratio as prescribed by the CBN, and Failure to comply with several directives and obligations imposed upon them by the CBN.”
