Regulatory Alerts2019-09-06 | OFI/DIR/GEN/CIR/07/033Guide To Charges By Banks And Other Financial Institutions In Nigeria (May 2017 - Removal of Interest Rate and Cap In Respect Of Part 2 Section 2.1.3)
The Central Bank of Nigeria issued a circular to financial institutions and mortgage sector stakeholders, announcing an amendment to the Guide to Charges. The amendment removes the maximum cap on mortgage finance rates, allowing these rates to be negotiable between banks and borrowers. This change takes effect on September 9, 2019.
CENTRAL BANK OF NIGERIA Financial Policy and Regulation Department Central Business District P.M.B. 0187 Garki, Abuja.
Tel: 09-46237401 E-mail:fprd@cbn.gov.ng OFI/DIR/GEN/CIR/07/033 September 5, 2019 Circular to all Other Financial Institutions and Mortgage Sector Stakeholders in Nigeria GUIDE TO CHARGES BY BANKS AND OTHER FINANCIAL INSTITUTIONS IN NIGERIA (MAY 2017- REMOVAL OF INTEREST RATE AND CAP IN RESPECT OF PART 2 Section.2.1.3.) The CBN in 2017, issued the Guide to Charges by Banks and Other Financial Institutions in Nigeria, to moderate charges on various products and services offered by banks and Other Financial Institutions (OFIs) in Nigeria.
Our attention has been drawn to some implementation challenges in respect of part 2 Section 2.1.3 (Mortgage Finance) in respect of the maximum cap of MPR + 5% placed on mortgage finance rates.
The CBN after due consideration of the concerns of stakeholders, hereby amend Part 2 (A & B): interest Rate and Lending Fees Subsection 2.1.3 Mortgage Finance to read "NEGOTIABLE". Please note that "subject to a maximum of MPR + 5%'' is no longer applicable.
This new provision takes effect from September 9, 2019.
Please be guided accordingly.
KEVIN N. AMUGO DIRECTOR, FINANCIAL POLICY AND REGULATION DEPARTMENT