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The Digest:

The Central Bank of Nigeria has revoked the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc, citing multiple breaches of banking laws and severe capital inadequacy.

Key Points:
  • The CBN revoked the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc.
  • The decision is part of efforts to reposition the mortgage sector and ensure compliance with laws and regulations.
  • The CBN acted under Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020 and its mortgage guidelines.
  • Cited violations include failure to meet minimum capital requirements and insufficient assets to cover liabilities.
  • The institutions were critically undercapitalised, with capital adequacy ratios below the CBN's prudential minimum.
  • They also failed to comply with several regulatory directives and obligations.
  • The CBN reaffirmed its commitment to ensuring stability within Nigeria's financial system.
This regulatory action underscores the ongoing tightening of oversight in Nigeria's financial sector, where non-compliance carries definitive consequences.

Sources: Vanguard News