The Central Bank of Nigeria (CBN) has given Suntrust Bank, Providus Bank, Globus Bank and Taj Bank up to December 2020, to expand their presence beyond two geo political zones in the country in compliance with a new regulation.
CBN at the weekend had issued a circular requiring all regional banks to add one additional geo political zone to its scope of operations. Regional banks before now are expected to carry on banking business operations within a minimum of six and a maximum of 12 contiguous states, lying within not more than two geo political zones as well as within the Federal Capital Territory.
In the circular signed by its director, Financial Policy and Regulation department, Kevin Amugo, the CBN said the directive is to further ensure that more Nigerians are captured within the banking system.
With this new directive which took effect on Friday, June 26, 2020, all the regional banks now have a timeframe of six months (December 2020) to establish their presence in the geopolitical zones outside of where they currently operate.
The circular read: “The CBN, pursuant to section 8 (g) of the CBN Scope, Conditions and Minimum Standards for Commercial Banks Regulations No (1) 2010 as revised on September 4, 2019; and in furtherance of its objective to promote financial inclusion hereby prescribes additional requirements for licenced regional banks (commercial and non interest).
“Effective the date of this circular, all banks with regional authorisation shall be required to operate from one additional geopolitical one as may be prescribed for each institution by the CBN, without prejudice to the existing requirement of minimum of two geo political zones of the federation. The essence is to promote spread and balance of regional banks across the country.
The compliance timeline to establish operational footprint at the advised zone shall not exceed six months from the issuance of the regulatory advice to each regional bank by the CBN.”