CBN Axes Aso Savings, Union Homes Licences Over Capital, Compliance Failures
By Patience Ikpeme
In a sweeping move aimed at sanitizing the mortgage sub-sector and enforcing adherence to financial regulations, the Central Bank of Nigeria (CBN) has withdrawn the operating licenses of two prominent institutions: Aso Savings and Loans Plc and Union Homes Savings and Loans Plc.
The revocation, announced in a statement by the Acting Director of the Corporate Communications Department, Hakama Sidi Ali (Mrs.), on Tuesday, takes immediate effect.
The decision was made under the authority granted to the CBN by Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020, as well as Section 7.3 of the Revised Guidelines for Mortgage Banks in Nigeria.
The CBN stated that the action was a direct consequence of the affected mortgage banks’ persistent failure to comply with numerous statutory and prudential requirements. The apex bank described the move as part of its ongoing drive to “re-position the mortgage sub-sector and promote a culture of compliance with relevant laws and regulations.”
Mrs. Ali’s statement detailed a serious pattern of non-compliance and financial distress at both institutions. She explained that the mortgage banks had “violated various Sections of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria.”
The key infractions cited by the regulatory body include: Capital Deficiency, which is a critical failure to meet the minimum paid-up share capital requirement mandated for their category of banking license by the CBN. Furthermore, the banks were determined to possess Insufficient Assets to Meet Their Liabilities, casting doubt on their ability to fulfill obligations to depositors and creditors.
In addition, both institutions were found to be Critically Undercapitalised, with their capital adequacy ratio falling below the minimum prudential ratio set by the CBN for the industry.
They were cited for Regulatory Defiance, having failed to adhere to several directives and obligations previously imposed upon them by the Central Bank of Nigeria.
“The affected institutions had violated various Sections of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria,” Mrs. Ali confirmed, detailing the severity of the financial and regulatory breaches.
Concluding the decisive announcement, the CBN communicated a firm commitment to its primary mission. “The CBN remains committed to its core mandate of ensuring financial system stability,” the statement concluded, signalling that the revocation is a necessary measure to protect the integrity of the nation’s financial structure and safeguard public interest within the housing finance space.
The revocation is expected to send a strong signal across the financial sector regarding the CBN’s resolve to enforce strict compliance with prudential guidelines and the dictates of BOFIA 2020.
