The Central Bank of Nigeria (CBN) on the 28th of March, 2023 issued a new set of guidelines for Banks and Other Financial Institutions (OFIs) desirous of changing their  original business licenses to other business operations licensed by the CBN.

What this means in effect is that with these guidelines, licensed businesses like microfinance banks can switch their CBN licenses for other licenses like a Payment Service Bank , Mortgage Bank ,or Finance Company license.

This article will be looking at the provisions of these guidelines, with a focus on :

– Their objectives.

– Their applicability scope.

– Their eligibility criteria for operating license change.

– Definition of terms.

– Applicable restrictions/prohibitions.

– Requirements for license change.

What are the objectives of the CBN Guidelines?

The objectives of the guidelines are to provide clarity on the requirements for the change of the various license types for Banks and Other Financial Institutions (OFIs) in Nigeria.

What is the applicability scope of the guidelines?

The guidelines are applicable to :-

– Commercial Banks

– Merchant Banks

– Non-Interest Banks

– Microfinance Banks

– Primary Mortgage Banks

– Payment Service Banks (PSBs)

– Any other institution the CBN may designate from time to time

What are the eligibility criteria for a change of operating license under the Guidelines?

For a financial institution to be eligible for a license change, it must:-

1. Be under the supervisory purview of the CBN.

2. Have no adverse supervisory report to its application.

3. Satisfy any other condition which the CBN may stipulate from time to time.

4. Have been in operation for at least 5 years.

What are the definitions of some important terms most commonly used in the guidelines?

Some of the terms used by the guidelines and their meanings include the following:-

1. Conversion – The transformation of an institution from one license type to another under separate regulatory guidelines.

2. Re-categorization – This is a transformation of an FI license within the same license type e.g switching between different categories of Microfinance Bank licensing.

3. Re-designation – This is a transformation effected by the change of name, status or operational in framework due to the direct effect of policy change, new regulation, or a regulatory directive.

4. Transition period – This is the transformation period of a bank or OFI from its legacy operations to the operations of the new license.

5. Off-boarding – This is the process of discontinuing services to some customers that are not desirous of migrating to the new license type.

6. Integration – This is the process of an FI unifying its existing & new customers under a proposed new license type.

What are some of the notable prohibitions or restrictions imposed by the guidelines if any?

A bank or OFI shall not while processing an application for license change do any of the following :-

1. Expand or reduce its current banking network.

2. Roll out new products and services.

3. Carry out any new strategic banking activity but the settlement of rights and obligations shall continue until extinguished in accordance with existing terms and conditions.

4. Engage in any banking activity specific to the proposed new license.

5. Any other requirement that may be presented from time to time by the CBN. 

What are the requirements for a change of license type under the CBN Guidelines?

Applications for a change of licensing are processed in the 2 stages under the Guidelines which are:-

1. The Approval-In-Principle (AIP) stage.

2. The final licensing stage. 

The most important requirements for licensing change include :-

1. An application to the Director of the Supervisory department of the CBN in charge of the applicant company’s current business category.

2. A business plan duly approved by the FI’s shareholders at an Annual General Meeting or extra-ordinary general meeting & board of directors.

3. A board resolution.

4. Rationale for the change.

5. A Governance structure policy.

6. A risk management framework.

7. Evidence of Sharia compliance where applicable.

8. Any other requirements stipulated by the CBN.

Los Angeles is a dream vacation destination for many, but it can be prohibitively expensive unless you know where to look. Trendy bars, hip salad joints and flashy hotels can set you back thousands of dollars even for a weekend visit, but with a little insider knowledge it’s possible to see the best of this incredible city for just a couple of hundred. Here is how to enjoy a dream weekend in the City of Angels. 

Immerse Yourself in Art at The Broad 

Some galleries in Los Angeles can prove quite an expensive visit; with entry fees, something from the gift shop, and maybe a cup of coffee afterward, a visit for two of you could easily cost upwards of $100. Thankfully, The Broad is a totally free-to-enter gallery, but this has no effect on the quality of the art on show. The museum cost a staggering $140 million dollars to build and was financed by art philanthropists Edythe and Eli Broad, who were adamant that the permanent collections should always remain free for visitors to view. The art on display is almost exclusively contemporary, with significant pieces from a number of post-war artists. You can easily spend several hours exploring the permanent collections, but once you’re finished make time to take in the building itself. This incredible slab of modernism is truly a sight to behold, whether you’re a budding architect or not! 

Stay at The Bike 

Finding an affordable place to stay in Los Angeles tends to be the biggest hurdle, but thankfully The Bicycle have that covered. The rooms are a generous size, with air conditioning and ample bathrooms, and they’re only a short car ride into the center of town. Better still they have their own huge casino, so if you fancy spending an evening in, you can play the night away without having to worry about grabbing a cab home.

 Of course, if you’re too exhausted to contemplate a round of poker downstairs then with the free WiFi at The Bicycle, you can head up to your room, get cozy in bed and play slots for free instead. Slot games don’t require quite the same level of concentration as a full-blown game of poker and, for those who are new to casino games, they provide an easy way to dip your toe in. You never know, by morning you might be feeling confident enough to play cards! 

Embrace the Foodie Scene

Los Angeles is full of delicious places to eat and drink, but some of them come with a hefty price tag. Many of the most exclusive of LA’s restaurants are Japanese, with N/Naka taking the top spot. There’s no denying that their lobster tartare drenched in rich uni butter is delicious, but when you break it down to ingredients and cost, there are probably quite a few places that represent better value for money! One of those places is Sapp Coffee Shop, which has even earned itself a spot in the Michelin guide. Whilst you can pop in and enjoy just a coffee, the dish of the day, every day, at this Thai spot is the beef boat noodle soup. It’s warming, delicious, incredibly healthy, and the broth is unrivalled by any other in the whole city. The other thing to mention is that whilst dinner at N/Naka will cost at least $225 without drinks, being able to have a filling meal with an iced coffee for $10 makes Sapp Coffee Shop a bit of a no-brainer. Once you’ve filled up at Sapp Coffee Shop you’ll be prepared for a full afternoon of sightseeing.

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