Regulatory Alerts2014-06-26 | BSD/DIR/GEN/LAB/07/014Guidelines on the Establishment and Rationalization of Branches and Other Outlets for Banks in Nigeria
The Central Bank of Nigeria (CBN) has outlined clear guidelines for the opening, closing, merging, upgrading and downgrading of branches or other banking outlets. These outlets are considered as locations where various financial services can be offered by authorized financial institutions. The process begins with an application from a licensed bank or an authorised non-banking financial institution. Once the CBN grants approval for opening, closing, merging, upgrading or downgrading branches or other banking outlets, the license holder must comply with several conditions and obligations. These include maintaining adequate liquid assets to meet daily operational needs of branches or other banking banking outlet(s); providing adequate physical security measures to protect the premises and clients of branches or other banking outlet(s) from unauthorised activities; and ensuring compliance with all existing and future relevant regulatory guidelines, standards, frameworks and directives. The process concludes when licensed banks or non-banking financial institutions successfully complete their assigned operations in full compliance with all the prescribed rules, regulations and conditions. However, should circumstances warrant, these same licensed banks or non-banking financial institutions may also apply for variations from existing guidelines, standards, frameworks and directives. The CBN has provided clear, concise and comprehensible summaries of the key points relating to opening, closing, merging, upgrading and downgrading of branches or other banking outlets. These include: 1. The application process for licensed banks or non-banking financial institutions. 2. The necessary liquid assets needed by branches or other banking banking outlet license holders. 3. The mandatory adequate physical security measures to protect premises and clients of branches or other banking banking outlet(s) from unauthorised activities. 4. The requirement for licensed banks or non-banking financial institutions to ensure full compliance with all existing and future relevant regulatory guidelines, standards, frameworks and directives. 5. The option for licensed banks or non-banking financial institutions to apply for variations from existing guidelines, standards, frameworks and directives when circumstances warrant. Therefore, based on the provided information by CBN, it is clear that: "The Central Bank of Nigeria has outlined clear, concise and comprehensible summaries of the key points relating to opening, closing, merging, upgrading and downgrading of branches or other banking banking outlets. These include the application process for licensed banks or non-banking financial institutions; the necessary liquid assets needed by branches or other banking banking outlet license holders; the mandatory adequate physical security measures to protect premises and clients of branches or other banking banking outlet(s) from unauthorised activities; the requirement for licensed banks or non-banking financial institutions to ensure full compliance with all existing and future relevant regulatory guidelines, standards, frameworks and directives; and the option for licensed banks or non-banking financial institutions to apply for variations from existing guidelines, standards, frameworks and directives when circumstances warrant."