introductory matters – setting up banking business

To set up and operate a banking business in Nigeria you must incorporate a company in Nigeria in the manner fulfilling the special requirements and apply and secure a valid banking licence issued by the Governor of the central bank of Nigeria. SECTION 2 BANKS AND OTHER FINANCIAL INSTITUIONS ACT 2004 (HEREIN AFTER CALLED THE BOFI ACT)

Several laws regulate banks and banking activity in Nigeria. However, chief among the laws are the Banks and other Financial Institutions Act Cap. B3 Laws of the Federation of Nigeria, 2004 and the Central Bank of Nigeria Act Cap. C4 Laws of the Federation of Nigeria, 2004. Other laws regulating banks and banking activities in Nigeria are:

1. Nigerian Deposit Insurance Corporation Act 2006;

2. Company and Allied Matters Act Cap. C20 Laws of the Federation of Nigeria, 2004;

3. Money laundering (prohibition) Act 2011;

4. Anti-Money-laundering and combating the financing of terrorism in Banks and other Financial Institutions in Nigeria Regulations 2013;

5. Economic and Financial Crime Commission Act 2004

6. Independent Corrupt Practises (and other related offences) Commission. (ICPC) Act 2000

7. Chartered Institute of Bankers of Nigeria Act 2007

Any person who desires to operate a banking business in Nigeria must apply in writing to the Governor of the Central Bank of Nigeria (CBN) for the grant of licence and shall accompany the application with the following:

a. A feasibility report of the proposed bank;

b. A copy of the Memorandum and Article of Association of the proposed bank;

c. A list of shareholders, directors, and principal officers of the proposed bank, together with their particulars.

d. The stipulated application fees;

e. Any such other information and document and report as the CBN may from time to time specify See Section 3 BOFI ACT 2004

Yes, the Governor of the Central Bank of Nigeria has the power with the approval of the board of directors to revoke any licence issued on any of the following grounds:

a. If a bank stops carrying on the type of banking business for which the licence was issued for a continuous period of 6 months or any period which is 6 months aggregate during a continuous period of 12 months.

b. Where the bank is into liquidation or is wound up or dissolved.