CBN Provides Update On Microfinance Banks
President Buhari discusses with Central Bank of Nigeria Governor Godwin Emefiele during the 4th Presidential Task Force meeting of ECOWAS on common currency for member states (file photo: State House)

The Central Bank of Nigeria (CBN) has released guidelines for the disbursement of lower denominations of Naira through microfinance banks (MFBs) in the country.

The CBN Director, Corporate Communications Department, Isaac Okorafor, made this known in a statement on Thursday.

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He said that this was contained in a circular issued by the Director, Currency Operations Department of the bank, Patricia Eleje.

All microfinance banks, according to him, must have a Composite Risk Rating (CRR) of above average in the most recent Risk Based Supervision (RBS) target examination before they were considered for the scheme.

He explained that the measure was to ensure that only MFBs with good corporate governance practices took part.

“Meanwhile, the participating MFBs must be willing to accept a mixture of new and other banknotes, and that the MFBs shall give 20 per cent of any withdrawal in lower denomination notes subject to a maximum of N50,000,” the statement read.

“Where beneficiaries withdraw more than once in a day, the circular said that disbursement will only apply to one transaction per day.

“Similarly, the MFBs are allowed to exchange notes subject to a maximum of N50,000 for customers with bank accounts and N10,000 for customers without bank accounts.

“In that situation, the banks must not exchange for same beneficiaries more than once a week.”

He also said, “The circular also warned MFBs against hawking, hoarding or using of funds obtained under the intervention for any other purpose,” the statement added.

“It also instructed the banks to put in place effective control measures that will ensure that banknotes disbursed to customers with or without accounts are not sold.

“Furthermore, the circular directed the banks to render weekly and monthly disbursement return to CBN branches where the intervention would be monitored periodically, and appropriate sanctions applied to erring MFBs.”