The Central Bank of Nigeria (CBN) has revoked the operational licenses of two prominent mortgage institutions, Aso Savings and Loans Plc and Union Homes Savings and Loans Plc, citing severe regulatory infractions and financial instability.
The announcement was made in a statement by Hakama Sidi Ali, the Acting Director of the Corporate Communications Department. According to the regulator, the move is a strategic step toward repositioning the mortgage sub-sector and enforcing a culture of legal compliance.
Regulatory Violations
The CBN exercised its powers under Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020 and the Revised Guidelines for Mortgage Banks in Nigeria. The affected banks were found to be in breach of several critical safety and soundness indicators, including:
Capital Deficiencies: Failure to maintain the minimum paid-up share capital required for their license category.
Insolvency: A lack of sufficient assets to meet their existing liabilities.
Undercapitalization: Capital Adequacy Ratios (CAR) dropped below the prudential minimum prescribed by the regulator.
Non-Compliance: Repeated failure to follow directives and obligations previously imposed by the CBN.
Focus on Stability
The apex bank emphasized that these revocations are essential to maintaining the overall health of the Nigerian financial system. “The CBN remains committed to its core mandate of ensuring financial system stability,” the statement noted.
The revocation is expected to trigger a liquidation process managed by the Nigeria Deposit Insurance Corporation (NDIC), which will oversee the protection of depositor funds and the settlement of valid claims.