CBN seeks to tighten screws on bank holding companies
The Central Bank of Nigeria (CBN) has turned its attention to controlling the growth and influence of some of the country's largest banks.
The Central Bank of Nigeria (CBN) has released an exposure draft of guidelines aimed at tightening oversight of financial holding companies in the country. The proposal, prompted by the need to address gaps and align with evolving regulatory and market developments, is set to undergo a six-month review period before it becomes law.
Key measures in the draft include raising minimum capital requirements and enforcing stricter eligibility rules for financial holding companies. These rules require companies to have a capital base at least 20% higher than their subsidiaries' combined capital requirements and to maintain direct ownership of at least 51% of their subsidiaries.
Notable financial holding companies in Nigeria include Access Holdings, First Hold Co., Guaranty Trust Holding Co., and Stanbic IBTC Holdings Plc. The CBN also released draft guidelines on ring-fencing operations for closely linked entities, with both sets of guidelines intended to complement each other in strengthening supervision and reducing risks within the financial sector.
Written by urgent.news from Africa Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
