Tel: 09-46237401 E-mail:fprd@cbn.gov.ng 09-46237401 FPR/DIR/GEN/CIR/07/025 April 16, 2019 Circular to all Other Financial Institutions in Nigeria and Mortgage Sector Stakeholders EXPOSURE DRAFT OF THE GUIDELINES FOR LICENSING AND REGULATION OF PRIMARY MORTGAGE BANKS IN NIGERIA The CBN issued the Revised Guidelines for Primary Mortgage Banks in Nigeria in November 2011, to re-position the mortgage sub-sector with a view to harnessing its potentials for sustained economic growth. The guidelines introduced enhanced requirements for capital, risk management, internal control and corporate governance.

Notwithstanding the measures put in place, the mortgage sub-sector continued to struggle against headwinds occasioned by unfavourable macroeconomic and other developments.

The Guidelines have been reviewed to strengthen primary mortgage banks as well as complement other on-going reforms in the mortgage sub-sector. An exposure draft of the revised Guidelines is hereby issued for comments and observations. The document can also be accessed at the Bank's website, www.cbn.gov.ng.

Please send your comments to the Director, Financial Policy and Regulation Department, with soft copies mailed to hiyole@cbn.gov.ng and cponyekwe@cbn.gov.ng within three (3) weeks from the date of this letter.

IBRAHIM S. TUKUR
For: DIRECTOR, FINANCIAL POLICY AND REGULATION DEPARTMENT CENTRAL BANK OF NIGERIA Financial Policy and Regulation Department Central Business District P.M.B. 0187 Garki, Abuja.

CENTRAL BANK OF NIGERIA
DRAFT GUIDELINES
FOR THE LICENSING AND REGULATION
OF
PRIMARY MORTGAGE BANKS
IN NIGERIA
CONTENTS
CHAPTER 1 .

PRIMARY MORTGAGE BANKING OPERATIONS .

1.1 PRIMARY MORTGAGE BANKING BUSINESS.

1.2 PERMISSIBLE ACTIVITIES

1.3	NON-PERMISSIBLE ACTIVITIES
CHAPTER 2 .
APPLICATION FOR LICENCE
2.1	CATEGORIES OF PRIMARY MORTGAGE BANKS
2.2	REQUIREMENTS FOR AN APPROVAL-IN-PRINCIPLE: .............................................................................................................................. 7
	GENERAL CONDITIONS FOR GRANTING A FINAL LICENCE .
2.3
2.4	CONDITIONS PRECEDENT TO COMMENCEMENT OF OPERATIONS ......... 10
2.5 FINANCIAL REQUIREMENTS
2.6 GOVERNANCE REQUIREMENTS .
CHAPTER 3 .
SOURCES OF FUNDS
CHAPTER 4
STATUTORY RETURNS, DISCLOSURE REQUIREMENTS AND COMPLIANCE .................. 14
4.1	RENDITION OF RETURNS
4.2	DEADLINE FOR SUBMISSION OF RETURNS
	DOMESTIC REPORT & AUDIT OPINION ON GOING-CONCERN ................. 15
4.3
4.4	PUBLICATION OF AUDITED FINANCIAL STATEMENTS ............................................................................................... 15
4.5	(REPORT ON INTERNAL CONTROL .
4.6 REPORTING REQUIREMENTS.
4.7 > DISCLOSURE
4.8	_____________________________________________________________________________________________________________________________ 17
4.9	COMPLIANCE WITH EXAMINERS' RECOMMENDATIONS ......................................... 17
CHAPTER 5 .
PRUDENTIAL REQUIREMENTS .
5.1	OPERATING RATIOS
5.2	PROVISIONING FOR NON-PERFORMING CREDITS .

5.3 OTHER KNOWN LOSSES (OKL).

5.4 MAINTENANCE OF STATUTORY RESERVES .

CHAPTER 6

REGULATORY APPROVALS
6.1	APPOINTMENT OF DIRECTORS AND MANAGEMENT STAFF
6.2	QUALIFICATION AND TENURE OF BOARD AND MANAGEMENT .......... 25

6.3 DISQUALIFICATION OF DIRECTORS AND OFFICERS

6.5

APPOINTMENT OF EXTERNAL AUDITORS

6.4 BRANCH EXPANSION, RELOCATION/CLOSURE
6.6 ACCESS TO THE NATIONAL HOUSING FUND [NHF] .................................................................................................................... 30 6.7 CHANGES IN THE OWNERSHIP STRUCTURE.

COMPLIANCE

CHAPTER 7 COMPLIANCE WITH LAWS, RULES AND REGULATIONS
7.1 PROHIBITIONS .

7.2 7.3 PENALTIES FOR VARIOUS OFFENCES
CHAPTER 8 GENERAL
ANNEXURE 1 QUESTIONNAIRE FOR MAJOR SHAREHOLDERS AND APPOINTEES TO BOARD AND

B. COMPETENCE AND CAPABILITY
C.	HONESTY, INTEGRITY, AND REPUTATION .

ANNEXURE 2
MONTHLY RETURNS .

E. MISCELLANEOUS

management position in banks and other financial institutions in NIGERIA .

BIODATA .

D. FINANCIAL SOUNDNESS AND/OR SOLVENCY
These revised guidelines are issued by the Central Bank of Nigeria [hereinafter referred to as "the CBN" or "the Bank"] in exercise of the powers conferred on it by the Central Bank of Nigeria Act CAP C4 LFN 2010 and the Banks and Other Financial Institutions Act CAP B3 LFN 2010 [hereinafter referred to as "BOFIA"].

PRIMARY MORTGAGE BANKING OPERATIONS

1.1 Primary Mortgage Banking Business

A Primary Mortgage Bank [PMB] shall be construed as any company that is licensed to carry out primary mortgage banking business in Nigeria. Primary Mortgage Banking Business in Nigeria entails granting loans directly to customers to purchase, renovate or build residential or commercial real estate. Primary mortgage banks are permitted to engage in the following businesses from or within any part of the federation:
a) Mortgage finance; b) Real estate construction finance within the permitted limits; c) Acceptance of savings, demand and time/term deposits; d) Drawing from mortgage funds (e.g. National Housing Fund and/or other related mortgage endowments) for on-lending; e) Financial advisory services for mortgage customers; f) Granting Mortgage/housing related Consumer loans. These are enhancements to residential mortgages which shall be limited to furniture, home appliances and generators subject to a maximum of 10% of total loans; g) Financing of rent-to-own properties; h) Home improvement loans; i) Incremental housing finance; and j) Other activities the CBN may approve from time to time.

1.3 Non-Permissible Activities

Primary mortgage banks shall NOT engage in the following activities:
a) Grant consumer or commercial loans other than as stated in Section 1.2 (f); b) Foreign currency denominated mortgage loans to customers; c) Leasing; d) Estate agency or facilities/project management;

1.2 Permissible Activities

e) Real estate development; f) All other businesses NOT expressly permitted by these guidelines; and g) Other activities that the CBN may classify as non-permissible from time to time.

Chapter 2 Application For Licence

2.1 Categories Of Primary Mortgage Banks

There shall be two (2) categories of PMBs:

A) State Primary Mortgage Banks (Regional Pmbs)

A State PMB is authorized to operate in one State or the Federal Capital Territory (FCT).

B) National Primary Mortgage Banks (National Pmbs)

A National PMB shall be permitted to carry on its business operations in more than one (1) state including the FCT.

2.2 Requirements For An Approval-In-Principle:

Any person seeking a licence for the operation of a primary mortgage bank in Nigeria shall apply in writing to the Governor of the Central Bank of Nigeria. The application shall be accompanied with the following: a) A non-refundable application fee of N1,000,000.00 [One Million Naira only] or any other amount that may be determined by the Bank from time to time, in bank draft, payable to the Central Bank of Nigeria.

b) A detailed feasibility report containing information that will include:
i) The objectives and aims of the proposed mortgage bank (including a vision & mission statement); ii) The need for the services of the mortgage bank; iii) The branch expansion program [if any] within the first 5 years; iv) The proposed training programme for staff and management succession plan; v) A five-year financial projection for the operation of the mortgage bank indicating expected growth and profitability; vi) Details of the assumptions which form the basis of the financial projections; vii) The organizational structure of the mortgage bank indicating the functions and responsibilities of the top management team; viii) The composition of the Board of Directors and the curriculum vitae of each member including other directorships held [if any]; ix) The conclusions based on the assumptions made in the feasibility report.

c) A copy of the draft Memorandum and Articles of Association; d) A list (in tabular form) showing the names of the promoters, amounts subscribed, details of the payment instrument (bank name and cheque number), their business and residential addresses and the names and addresses of their bankers; e) Evidence of escrowing the minimum capital deposit into CBN account via NIBSS. The minimum capital deposit will be refunded with interest after the proposed bank obtains its final licence; f) A draft detailed manual of operations; g) verifiable evidence of payment of capital contribution by each of the subscribers to the shares of the proposed bank, including statement of the bank account from which the capital contribution by the subscriber was paid, covering a period of nine (9) months (6 months before and 3 months after the transaction date of the capital contribution).

h) Valid means of identification of the proposed directors; i) Bank Verification Numbers (BVN) of the proposed directors; j) Two (2) Credit Bureau reports in respect of each of the promoters/directors; and k) Tax clearance certificates of each of the promoters/directors for the immediate past three (3) years.

The application will be subjected to an appraisal which may lead to an Approval-in-Principle (AIP), if successful. The AIP will state conditions to be complied with for the grant of a final licence. The CBN shall communicate the status of the application to the applicant not later than 90 days of receipt of the application. No proposed mortgage bank shall incorporate/register its name with the Corporate Affairs Commission (CAC) until an Approval-inPrinciple (AIP) has been obtained from the CBN, a copy of which shall be presented to the Corporate Affairs Commission. After incorporation and opening o f a corporate account, the proposed PMB may apply for and be paid 20% of its capital deposit to enable it meets its pre- operational expenses.

2.3 General Conditions For Granting A Final Licence

a) The promoters of a proposed PMB shall submit the following documents to the CBN before such company is considered for the grant of a final licence and thereafter, permitted to commence operations.

(i) A Copy of the shareholders' register in which the equity interest of each shareholder is properly reflected [together with the original for sighting]; (ii) A copy of the share certificate issued to each shareholder.

(iii) A Certified true copies of Form CAC2 (Statement of Share Capital and Return of Allotment), Form CAC3 (Notice of Situation/Change of Registered Address) and Form CAC7 (Particulars of Persons who are first Directors of the Company); (iv) An undertaking stating that:
The Board of Directors approved by the CBN has been constituted.

It shall not engage in capital reduction.

Quorum for its Board meetings shall be 2/3 of members.

It shall not change the Board composition, external auditor or engage a management staff without the prior written approval of the CBN.

Its directors shall comply with the Code of Conduct for Directors of Other Financial Institutions in Nigeria.

It shall put in place and implement a contingency funding plan after the commencement of operations (v) A certified true copy (CTC) of the Memorandum and Articles of Association filed with the Corporate Affairs Commission.

(vi) A CTC of the certificate of incorporation of the company [together with the original for sighting purposes only].

(vii) A list of the proposed management team, attaching the personally signed and dated curriculum vitae (CV) of each person.

(viii) The proposed firm of external auditors, attaching a profile of the firm.

(ix) Evidence of acquisition of a conducive and well equipped office space, which shall be subject to CBN inspection prior to recommendation for final licence.

(x) Evidence of membership of Mortgage Banking Association of Nigeria (MBAN).

(xi) Technical service agreement or a written declaration that it is not applicable to the proposed PMB, if it is not.

(xii) Tax Identification Number (TIN) of the proposed bank. (xiii)Evidence of registration with at least two (2) credit bureaux 2.4 CONDITIONS PRECEDENT TO COMMENCEMENT OF OPERATIONS Where the company has been granted a final licence for mortgage banking operations, it will submit the following documents prior to commencement of business: (i) An application for the refund of the balance of its capital deposit (where it had received a percentage of the capital deposit post AIP or full sum with accrued interest where it had not), giving its bank details such as account name, account number, sort code and branch address.

(i) A copy of the letters of offer and acceptance of employment by management staff and a written confirmation that the management team approved by the CBN had been installed.

(ii) The opening statement of affairs audited by an approved firm of chartered accountants.

(iii) A letter to the CBN, stating the proposed date of commencement of business.

Caveat

a) The CBN may at any time vary or review any condition of a licence or impose additional conditions.

b) Where a licence is granted subject to certain conditions, the PMB shall comply with those conditions to the satisfaction of the CBN within such period as may be deemed appropriate in the circumstances. Any PMB that fails to comply with such conditions shall be guilty of an offence under BOFIA.

2.5 FINANCIAL REQUIREMENTS
The financial requirements which may be varied as the CBN considers necessary, are as follows:
Minimum capital (National PMB) - N8,000,000,000.00 Minimum capital (Regional PMB) - N5,000,000,000.00 Non-refundable application fee - N1,000,000.00 Non-refundable licensing fee - N2,000,000.00 Change of name fee - N100,000.00

2.6 Governance Requirements

a) The number of directors on the board of a Mortgage Bank shall be a minimum of seven [7] and a maximum of twelve [12]. The nonexecutive members shall outnumber the executive directors at any point in time.

b) For non-Nigerian directors, a certificate/statement of good conduct from the Police Service (or other appropriate authority) in country of domicile shall accompany the resume, completed Approved Persons Questionnaire and copies of academic and professional qualification c) For resident non-Nigerian directors, reference shall be made to his employer, university, and legal permit to reside and work in Nigeria. This is in addition to a certified true copy of the director's passport, completed Approved Persons Questionnaire and copies of academic and professional qualification certificates.

d) All directors and top management staff of PMIs shall comply with the requirements of the relevant governance codes, Approved Persons Guidelines and related regulations issued by the CBN from time to time.

NOTE: The attached Approved Persons Regime' Questionnaire (annexure 1) shall be filled and attached to the document of each significant shareholder (holding at least 5% of the bank's equity), proposed director and management staff's signed curriculum vitae (CV).

Chapter 3 Sources Of Funds

The sources of funds of a PMB shall consist of the following:
a) Equity paid-up share capital and reserves. b) Debenture/other loans. c) Funds from NHF and other on-lending facilities. d) Savings, time/term and demand deposits. e) Any other source(s) as may be approved by the CBN.

Chapter 4

STATUTORY RETURNS, DISCLOSURE REQUIREMENTS AND COMPLIANCE

4.1 Rendition Of Returns

In compliance with the provisions of Section 25 of BOFIA, the following returns are to be submitted to the Bank by every PMB: (i) Monthly Returns and attached schedules (see annexure 2): Monthly returns shall be submitted through electronic channel(s) as may be prescribed by the CBN from time to time.

(ii) Anti-Money Laundering/Combating the Financing of Terrorism Returns: An AML/CFT return shall be made monthly to the Head, Nigeria Financial Intelligence Unit (NFIU) and CBN in line with the frequency specified in the AML/CFT Prohibition Act and CBN AML/CFT regulations. Where there are no qualifying transactions, a NIL return must be filed.

(iii) Monthly returns on consumer complaints, to the Director, Consumer Protection Department, CBN.

(iv)Half yearly mortgage lending returns, to the Director, Other Financial Institutions Supervision Department, CBN.

(v) Daily report on loans and advances, which should be reported to the CRMS before disbursement to beneficiaries.

(vi)Monthly upload on the status of all loans and advances, to at least two Credit Bureaux.

4.2 Deadline For Submission Of Returns

Every Mortgage bank shall submit the required returns to the Bank within the period specified as follows:
a. In accordance with the provisions of the Money Laundering Prohibition Act and CBN's AML/CFT Regulation.

b. Half yearly mortgage lending returns not later than twenty eight (28) days after the end of each half-year.

c. Monthly returns, not later than fourteen [14] days after the end of each month.

4.3 Domestic Report & Audit Opinion On Going-Concern

Section 29(8) of BOFIA requires the approved auditor to forward to the Bank, a copy of the domestic report [management letter] on the PMB's activities, not later than 3 months after the end of the PMB's financial year. Every audited financial statement of a mortgage bank shall contain opinion on the ability of such an institution to continue into the foreseeable future as required by the International Auditing Guidelines No. 23 on going-concern. Any auditor that fails to comply with the requirement of this section shall be sanctioned by the Bank.

4.4 Publication Of Audited Financial Statements

In accordance with the provisions of Section 27(1) of BOFIA, as amended; a) Every PMB shall submit its audited financial statements and the abridged version of the accounts to the Director, Other Financial Institutions Supervision Department for a statement of no objection before publication.

b) A PMB shall, subject to a no objection from the CBN, not later than 4 months after the end of its financial year:
(i) Publish the abridged version of its approved financial statements in at least two daily newspapers printed in and circulating in Nigeria; and (ii) Exhibit same in a conspicuous position in each of its offices and branches in Nigeria.

c) Every published account of a PMB shall disclose in details, penalties paid as a result of contravention of the provisions of BOFIA, and provisions of other extant policies/guidelines. The auditor's report shall also reflect such contravention(s).

d) Copies of the newspapers in which the approved account is published shall be forwarded to the Central Bank of Nigeria.

e) Every audited financial statement must bear the auditors' signature, seal and certification stamp.

f) The financial statements must be accompanied with:
(i) Copies of all relevant certificates of deposit, placement and sums on call from the respective correspondent banks; and (ii) A breakdown of quoted investment (if any), showing name of company, number of units and historical cost of investment.

4.5 REPORT ON INTERNAL CONTROL
a) The bank must as part of its audited financial statements include a statement on the effectiveness of the internal controls signed off by the Board of Directors.

b) The internal control framework adopted by the bank should be developed in line with the Committee of Sponsoring Organizations of the Treadway Commission Framework (COSO), 2004, and should comprise the following areas of Internal control; control environment, risk assessment, control activities, information and communication and monitoring.

4.6 Reporting Requirements

All PMBs must publish financial reports in line with the International Financial Reporting Standards (IFRS).

4.7. Disclosure

a) Every PMBs must develop, implement and submit evidence of implementation of an internal control framework (this should be clearly ascertainable from its manual of operations).

b) A PMB shall make a declaration on the risks faced by the entity and the controls implemented to mitigate the identified risks as part of its directors' report.

4.8 Know Your Customer

The entity must evidence the existence and implementation of policies on Know Your Customer (KYC) requirements which the financial institution performs in identifying its clients and other relevant information on their business relationship.

4.9 Compliance With Examiners' Recommendations

a) All PMBs are required to comply with the recommendations and directives contained in examination reports conducted by the CBN/NDIC.

b) All PMBs are required to convene a meeting of the Board of Directors within 2 weeks after the receipt of CBN/NDIC examination reports, where the management of the PMB shall present the examination report.

c) The Board shall, not later than two weeks after the presentation of the examination report, communicate its response to the CBN/NDIC.

Chapter 5 Prudential Requirements

5.1 Operating Ratios

Every PMB shall comply with the following prudential requirements:
a. Cash Reserve Ratio [CRR]: A minimum cash reserve ratio of two percent [2%] of adjusted deposit liabilities1 shall be in its reserve account with the CBN.

b. Liquidity Ratio: A minimum ratio of twenty percent [20%] on specified liquid assets against deposit liabilities. Specified liquid assets shall include treasury bills, fund placements, money at call and short-term investments with not more than 90 days maturity.

c. Capital Adequacy Ratio [CAR]: A minimum capital adequacy ratio of ten percent [10%] against risk assets.

d. Mortgage Assets to Total Assets Ratio: A minimum of sixty percent [60%] of mortgage assets to total assets.

e. Mortgage Assets to Loanable Funds2 Ratio: A minimum of 70% of loanable funds should be used in the creation of mortgage assets. For the avoidance of doubt, loanable funds shall be construed as the amount of total deposit plus funds from NHF and other on-lending facilities less cash reserve and liquidity ratios of a Primary Mortgage Bank.

f. Real Estate Construction Finance to loanable funds: A maximum of thirty percent [30%] of real estate construction finance to loanable funds.

g. Fixed Assets/Long-term Investments and Branch Expansion: No PMB shall be allowed to finance any of the following other than from shareholders' funds unimpaired by losses: (i) acquisition of fixed assets;

1 Total deposits plus deposits in suspense and dormant accounts 2 Loanable funds = total deposits plus sums received from FMBN/NHF for on-lending.
(ii) equity investments and investment in long-term debentures; (iii) Branch expansion: In consideration of request for any or a combination of the above options, reference shall be made to the aggregate value of the listed items against the shareholders' funds unimpaired by losses.

(iv) For the avoidance of doubt, the eligible shareholders' funds shall be derived only from the most recent audited financial statement approved by the Bank.

h. Maximum equity Investment Holding Ratio: No Mortgage Bank shall invest more than ten percent [10%] of its shareholders' funds unimpaired by losses in the equity of any venture or undertakings without the prior approval of the Bank.

i. Minimum mortgage assets in residential mortgage: No mortgage bank shall invest less than 75% of its mortgage assets in residential mortgages.

j. Capital Funds to Net Credit Ratio: Every Mortgage Bank shall maintain at all times a minimum ratio of 1:10 between its shareholders' funds unimpaired by losses and net credits.

k. Maximum Exposure to a Single Borrower [Single Obligor Limit]: No Mortgage Bank shall grant credit which in aggregate value is more than five percent [5%] in the case of an individual and twenty percent (20%), in the case of a corporate body, of its shareholders' funds unimpaired by losses to a single borrower. For avoidance of doubt, the credit as applicable to this section shall include any advance, loan, financial guarantee, credit facility or any other liability; and for the purpose of this section, all advances, loans or credit facilities extended to any person shall be aggregated in the determination of the specified limit and shall include all credits extended to any subsidiaries or associates of a body corporate.

l. Non-performing loans to total loans ratio: No PMB shall permit the nonperforming loans in its portfolio to exceed 10% of total loans and advances. Once this ceiling is breached, the PMB must suspend granting new loans and advances until it has made such recoveries as would keep this ratio within the permissible range.

m. Maximum loan to value ratio: 80%. The equity contribution of the borrower must not fall below 20%.

Any director or manager of a PMB who, during his or her tenure, fails to ensure compliance with the prudential requirements for a period of six consecutive months without satisfactory explanation and evidence of efforts being made to address the contravention shall be appropriately sanctioned in line with extant regulation. The Bank shall however, inform in writing the Board of every PMB of the observed prudential deficiency and shall request it to forward its corrective action plan.

5.2 Provisioning For Non-Performing Credits

In line with the approved prudential requirements for banks and other financial institutions (which took effect on July 1, 2010), the nature and tenor of specialized loans shall be key factors in providing for nonperforming facilities. To this end, the loans of a PMB may be categorized into three (3) namely; Mortgage loans, commercial real estate financing and other loans.

a. Mortgage Loans. (Annexure 6 of the prudential requirements)

	1% of total outstanding principal balance
Category	Classification	Days past due	Treatment of Income	% of Provision
1	Watch list	Where mark-up/ interest or principal is overdue (past due) by more than 90 days from the due date Unrealized	mark-up/
	interest	to be put	in
	Suspense	Account
	and	not	to	be
	credited	to	Income
	Account except when realized in cash. As above	10%	of	total
	outstanding principal balance
1A	Substandard	Where	mark-up/
interest or principal is overdue (past due) by more than 180 days from the due date
2	Doubtful	Where	mark-up/ As above	Unprovided
interest or principal is	balance	should
overdue (past	due)	not exceed 50% of
by more than 1 year	the	estimated net

from the due date	realizable value of 3 the security
	As above	100%	of	total
	principal outstanding balance
3	Lost	Where	mark-up/
interest or principal is overdue (past due) by more than 2 years from the due date
b.	Commercial Real Estate Financing
Category	Classification	Days past due	Treatment of Income	% of Provision 1% of total outstanding principal balance.
	Unrealized	mark-up/
	interest	to be put	in
	Suspense	Account
	and	not	to	be
	credited	to	Income
	Account except when realized in cash.
Watch list	Where	the	amount
1	recovered during a period is between 60% and 75% of the amount due and/ or any installment thereof is overdue by more than 180 days.	As above	25%	of	total
	outstanding principal balance.
Substandard	Where	the	amount
1A	recovered during a period is less than 60% of the amount due and/or any installment thereof is overdue by 180 days to 1 year. As above	50%	of	total
	outstanding principal balance.
Doubtful	Where the amount recovered during a
2	period	is	less	than
60% of	the amount
due	and/or	any
installment thereof is overdue by 1 year to 2 years.	As above	75%	of	total
	outstanding principal balance
Very Doubtful	Where the amount
3	recovered during a period is less than 60% of the amount due and/or any

3 Determine the net realizable value of collateral as objectively as possible, divide this value by two and net off earlier provisions on the same loan. Unprovided balance should then be < 50%.

installment thereof is overdue by 2 years to 3 years.	As above	100%	of total
	outstanding principal balance
Lost	Where the amount
4	recovered during a period is less than 60% of the amount due and/or any installment thereof is overdue by more than 3 years.

		10% on	total
		outstanding principal.
Category	Classification	Days past due	Treatment of Income	% of Provision
1	Sub-standard	91 - 180 days	Unrealized	mark-up/
	interest	to be put	in
	Suspense	Account
	and	not	to	be
	credited	to	Income
	Account	except
	when realized in cash.
2	Doubtful	181 - 360 days	As above	50% on	total
		outstanding principal.
3	Lost	Above 360 days	As above	100% of total outstanding principal.

c. Other Loans (all loans that are neither mortgage nor commercial real estate loans but which are permissible under section 1.2. The provisions for loans that meet this criteria shall remain as follows:
NB: Performing loans would still attract 1% general provision

5.3 Other Known Losses (Okl)

All assets for which the net realizable value has fallen below the historical cost shall have the difference in value recognized and charged to the income account as "other known losses".

5.4 Maintenance Of Statutory Reserves

Every PMB shall maintain a reserve fund and shall out of its net profit after taxation and before any dividend is declared, transfer to the statutory reserves as follows:
a) Where the reserve fund is less than the paid-up share capital, a minimum of 20% of the net profit; or b) Where the reserve fund is equal to or in excess of the paid-up share capital, a minimum of 10% of net profit; c) No transfer to the reserve fund shall be made until all identifiable losses have been made good.

Chapter 6 Regulatory Approvals

6.1 Appointment Of Directors And Management Staff

Every appointment of a director and management staff by the bank shall require the prior written approval of the Bank.

For This Purpose:

a) In the case of director[s] the following documents shall be submitted to the Bank:
(i) A copy of the resolution of an Annual General Meeting [AGM] or an Extra-Ordinary General Meeting [EGM] in the case of a reconstitution of the board of directors of a PMB; (ii) A copy of the resolution of the Board of Directors of such mortgage bank in case of filling any vacancy, due to retirement, resignation or death; (iii) A copy of a detailed curriculum vitae of the proposed director which shall contain career history to date and any other directorship appointments; (iv) A completed copy of the Approved Persons Regime Questionnaire (see Annexure 1).

After obtaining the approval of the Bank, the mortgage bank shall forward the following documents:
(v) A certified true copy of form CAC7A [Notice of Change of Directors, or in the name, residential address or postal address of Director] reflecting the change in Board composition.

(vi) A duly completed Director's Code of Conduct Form obtained from the Bank.

b) In the case of a management staff, the mortgage bank shall submit the following documents to the Bank:
(i) A copy of the operating organizational structure approved by the Bank; (ii) A copy of the Board resolution signed by a director and the Company Secretary in support of the appointment; (iii) A copy of the detailed curriculum vitae of the appointee showing educational attainments and career history; (iv)A completed copy of the Approved Persons Regime Questionnaire (see Annexure 1).

Any PMB that contravenes the requirement of this Section shall be subject to the sanction prescribed by the Bank.

6.2 QUALIFICATION AND TENURE OF BOARD AND MANAGEMENT
a. The following minimum qualifications and experience are mandatory for officers who may occupy the key/top management positions in a PMB.

i) Managing Director/Chief Executive - a recognized University Degree, its equivalent or Professional qualification with at least 10 years post qualification experience in banking, finance or other related fields.

ii) Departmental Head - a recognized University Degree, its equivalent or Professional qualification with at least 7 years post qualification experience in banking, finance or other related fields.

iii) Any person with any other qualifications or experience that may be considered adequate by the CBN can hold any of positions [i] and [ii] within the institution.

iv) Every PMB shall be required to obtain a CBN approval in writing for its organizational structure and top management team.

b. Managing Director/Executive Director of a PMB shall hold office for a fixed term of not more than 5 years and such term may be renewed only once, while non-executive directors shall serve for a fixed term of not more than 4 years and such term may be renewed only thrice. For avoidance of doubt, the maximum tenure of a managing director/ executive director shall not exceed a total of 10 years while a nonexecutive director shall serve for periods not exceeding 12 years in total.

6.3 Disqualification Of Directors And Officers

a. Every PMB shall, before appointing any director or chief executive, seek and obtain the Bank's written approval for the proposed appointment.

b. No person shall be appointed or shall remain a director, secretary or an officer of a bank who:
i) Is of unsound mind or as a result of ill health is incapable of carrying out his duties; or ii) Is declared bankrupt or suspends payments or compounds with his creditors including his bankers; or iii) Is convicted of any offence involving dishonesty or fraud; or iv) Is guilty of serious misconduct in relation to his duties; or v) In the case of a person possessed of professional qualification, is disqualified or suspended (otherwise than of his own request) from practicing his profession in Nigeria by the order of any competent authority made in respect of him personally.

c. No person who has been a director of or directly concerned in the management of a PMB which has been wound up by the Federal High Court shall, without the express authority of the Governor, act or continue to act as a director of, or be directly concerned in the management of any other bank.

d. Any person whose appointment with a PMB has been terminated or who has been dismissed for reasons of fraud, dishonesty or conviction for an offence involving dishonesty or fraud shall not be employed by any PMB in Nigeria.

e. Any bank which knowingly acts in contravention of subsection (1), (2), 45 (3) or (4) of BOFIA is guilty of an offence and liable on conviction to a fine of N100,000.

f. No person who has been a director, or has been directly involved in the management of a failed licensed mortgage Bank, finance company, discount house, deposit money bank or any other financial institution shall, without the written authority of the Governor of Central Bank of Nigeria, act or continue to act as a director or be indirectly involved in the management of any licensed Mortgage Bank.

6.4 Appointment Of External Auditors

a) Every PMB shall appoint an "approved Auditor" for the duties and under the conditions specified hereunder.

b) The duties of the approved Auditor shall include the issuance of a report to the shareholders on the financial statements of a mortgage bank and such report shall contain statements as to the matters and such other information that may be prescribed from time to time by the Bank.

c) The report of the approved Auditor shall be read together with the report of the directors at the annual general meeting of the shareholders of the mortgage bank.

d) Auditors of the PMB shall be subject to tenure rules and limits as stipulated by the CBN.

e) The approved auditor shall be an auditor who satisfies the following requirements:
(i) membership of a recognized professional accountancy body in Nigeria; (ii) approved by the Central Bank of Nigeria; (iv)carrying on in Nigeria, a professional practice as an accountant and/or auditor.

f) No person shall be appointed as the auditor of a mortgage bank if:
(i) He has any interest in that bank otherwise than as a depositor; (ii) He is a director, officer or agent of such bank; (iii) His firm is one in which a director of the mortgage bank has any interest as partner or director; (iv) He is indebted to the mortgage bank.

g) Any auditor who, after appointment, is subsequently affected by Section f (i-iv) above shall immediately cease to continue as an auditor of the mortgage bank.

h) If an approved auditor, in the course of his duties as an auditor of a mortgage bank, is satisfied that: (i) there has been a contravention of BOFIA or that an offence under any other law, regulations or guidelines has been committed by the mortgage bank or any of its officers; or (ii) Losses have been incurred by the mortgage bank which substantially reduce its capital funds; or (iii) Any irregularity which jeopardizes the interest of depositors or creditors of the mortgage institution or any other irregularity has occurred; or (iv)He is unable to confirm that the claims of depositors or creditors are covered by the assets of the mortgage institution; He shall immediately report the matter to the Central Bank of Nigeria.

i) The approved auditor shall also forward to the CBN, a copy of his domestic report on the activities of the mortgage bank not later than three [3] months after the end of the financial year of such mortgage bank.

j) The approved auditor shall have the right of access at all times to all books, accounts and vouchers of the mortgage bank and shall be entitled to require from the directors, managers and officers of the mortgage bank all information and explanations that he considers necessary for the performance of his audit.

k) If any mortgage bank fails to appoint or fill a vacancy for an approved auditor, the CBN shall appoint a suitable person for that purpose and shall fix the remuneration to be paid by the PMB to such auditor.

l) The appointment of an approved auditor shall not be determined without a prior written approval of CBN.

m) Any approved auditor who acts in contravention of the foregoing requirements or fails deliberately or negligently to comply with the requirements of this section shall be liable to a fine of a maximum of N500,000 or a determination of his status as an approved auditor to all financial institutions under the supervisory purview of the CBN.

n) An approved auditor shall hold office for a continuous period not exceeding 10 years.

6.5 Branch Expansion, Relocation/Closure

a) No PMB shall open, relocate or close a branch without prior approval in writing of the Bank.

b) Every application for the opening of a new branch shall be accompanied with the following documents:
(i) A copy of Board resolution in support of the proposed branch; (ii) A detailed feasibility report on the proposed branch showing:
The rationale for the proposed branch.

The initial capital outlay for the proposed branch.

Projected income and expenditures for a 3-year period.

The proposed organizational structure of the proposed branch.

The staffing requirements.

The assumption for the financial projections in the report.

c) The PMB seeking approval for the opening of a new branch must have a track record of good financial performance, regularity in the rendition of all required returns, compliance with laws, rules and regulations.

d) Every application for the closure of a branch shall be accompanied with the following:
(i) A copy of Board resolution authorizing the closure. (ii) Reasons for the closure with relevant evidence. (iii)Arrangements put in place to settle the customers of the affected branch.

6.6 Access To The National Housing Fund [Nhf]

a) No PMB shall be allowed to apply for the NHF without obtaining from the CBN, a written approval/clearance of its capacity to be considered for such facilities.

b) In appraising requests from the PMBs, the Bank shall take into consideration the following factors:
(i) Compliance with the minimum paid-up share capital and capital adequacy ratio; (ii) Asset quality; (iii) Management competence/stability; (iv) The integrity of the directors of the mortgage bank; (v) Earnings trends; (vi) Liquidity; and (vii) Compliance with laws, rules and regulations.

c) The written approval/clearance from the Bank shall accompany every application by a cleared mortgage bank to the Federal Mortgage Bank of Nigeria [FMBN] or any other institution legally empowered to disburse such funds.

d) Every mortgage bank shall utilize wholly and exclusively all funds obtained from the NHF for mortgage lending or the creation of mortgage assets.

e) Aggregate funds obtained from the NHF shall be shown separately in the balance sheet of every mortgage bank.

f) Any audited financial statements of a PMB that fails to show separately, the aggregate funds obtained from the NHF in the balance sheet of such an institution shall not be considered for approval by the Bank.

6.7 Changes In The Ownership Structure

Except with the prior written consent of the Bank, no PMB shall enter into an agreement or arrangement:
a) which results in a change in the control of the PMB; b) for the sale, disposal or transfer of the whole or any part of the business of the PMB; c) for the amalgamation or merger of the PMB with any other person; d) for the reconstruction of the PMB; and e) to employ a management agent or to transfer its business to any such agent.

Chapter 7 Compliance With Laws, Rules And Regulations

7.1 Compliance

Every PMB shall comply with the requirements of the monetary policy guidelines, the provisions of BOFIA, the CBN Act 2007, Money Laundering (Prohibition) Act 2011 (as amended), CBN AML/CFT Regulations 2013, all relevant guidelines, rules and regulations, Uniform Underwriting Standards as well as circulars and supervisory/regulatory letters issued by the Bank from time to time.

7.2 Prohibitions

A mortgage bank shall not: a) Grant any loan, advance or credit facility for the building, improvement or extension of a dwelling house unless adequate security has been taken on an existing property or the property in respect of which the loan or advance is being granted; b) Grant any loan, advance or credit facility on the security of its own shares; c) Pay dividend on its shares until all its preliminary expenses, organizational expenses, shares issue expenses, amount of losses incurred and other capitalized expenses not represented by tangible assets have been completely written off and adequate provisions made on actual and contingent losses on risk assets; d) Employ or continue the employment of any person who is or has at any time been adjudged bankrupt or has suspended payment to or has compounded with his creditors or who is or has been convicted by a court for an offence involving fraud, dishonesty or professional misconduct; e) Permit to be outstanding without the prior approval in writing of the Bank, unsecured advances, loans or credit facilities of an aggregate amount in excess of N1,000,000 to:
(i) Any of its directors whether such advances, loans or credit facilities are obtained by the directors jointly or severally; (ii) Any firm, partnership or private company in which the PMB or any one or more of its directors is/are interested either directly or as a guarantor; (iii) Any public or private company in which the PMB or any one or more of its directors jointly or severally maintains shareholding of not less than five percent either directly or indirectly.

f) Engage in any business other than those for which it was licensed; and g) Write-off any director/insider related facility without the prior written approval of the Bank.

7.3	PENALTIES FOR VARIOUS OFFENCES
S/N	OFFENCES	PENALTIES
1	Operating without a valid licence.	Outright closure of the bank and prosecution of its promoters.
2	Engaging in activities outside the	A fine of N100,000 for each day of the default with a
approved business.	maximum of N5 million. In addition, the bank should forfeit the estimated profit.
3	Failure	to	service	credit	facility
granted	to	Directors	and	their
relations.	Forced repayment of the facility plus the accrued interest and suspension of the Director from the membership of the Board until the payment is finally redeemed. Removal from the Board if failure to pay persists beyond 365 days.
4	Failure to obtain the approval of the CBN for the appointment of new Directors and top management staff.	A fine of N100,000 payable, by the institution, for each of the Directors or top management staff so appointed. In addition, the appointee should cease to function in that position.
5	Late	rendition	of	monthly	or	A fine of N10,000 for each day of the default.
quarterly returns.
6	Late submission of audited Financial	A fine of N10,000 for each day in which the bank
statements.	fails to submit the statement.
7	Failure	to	convene	a	special
meeting of the Board of Directors for the presentation of an Examination Report within four weeks	i)	A fine of N20,000 for each day during which the offence continues.
	ii)	Removal of MD and/or EDs where the noncompliance is for a period more than eight weeks.
8	Failure to convey the response of the Directors to the CBN within two weeks of the presentation.	i)	A fine of N20,000 for each day during which the offence continues.
	ii)	Removal of MD and/or EDs where the noncompliance is for a period more than six weeks.

S/N	OFFENCES	PENALTIES
9	Submission	of	false/Inaccurate	a)	For the bank, a fine of N2,000,000
information to regulators.	b)	For individuals, a fine of N100,000
	Failure to render accurate returns three times within a financial year will attract suspension of the Managing Director and all relevant officers responsible for submitting the information. A fine of N500,000 for non-publication and
10	Failure to publish annual accounts in the newspaper.	thereafter publish in a newspaper
11	Failure	to	disclose	contraventions
and	penalties	in	the	audited
financial statements.	A	fine	of	N2,000,000	for	non-disclosure	and
	thereafter	publish	again,	disclosing	the
	contraventions. A fine of N1,000,000 for the bank, N100,000 for each
12	Failure to maintain proper books of accounts and records.	Director and N50,000 each for the officers involved. In the case of the bank, a fine not more than N500,000.
13	Failure to provide any information required by the CBN in the prescribed period and manner.	In the case of individuals, a fine not more than N50,000 in addition to other disciplinary action deemed necessary by the CBN. A fine of N500,000 payable per staff by the bank.
14	Failure to report dismissed bank staff to the CBN/NDIC.	A fine of N500,000 payable by the bank.
15	Failure to report fraud and forgeries to CBN/NDIC.	a)	A fine of N500,000 and closure of such branch.
16	a)	Opening or relocation of branch without the approval of the CBN.
b)	Closing of branch without the approval of the CBN. b)	A fine of N500,000 in addition to re-opening the branch.
17	Use	of	depositors'	funds	for	A fine not less than N1,000,000 in addition to an
assets acquisition.	immediate injection of funds by the shareholders to the extent of the use of the depositors' funds.

S/N	OFFENCES	PENALTIES
18	Revaluation of fixed assets without	Reversal to the previous value and issuance of a
CBN approval.	warning letter. Failure to reverse to the previous value after a warning letter has been issued will lead to three months suspension of the Managing Director without pay.
19	Failure to disburse the NHF funds and keep appropriate records as stipulated in the guidelines.	A fine of N1,000,000 payable to CBN. In addition, the PMB shall pay interest at MPR to the FMBN during the period the funds were kept. The Managing director and the officer concerned shall be sanctioned by the CBN. A fine of not more than N2million. In addition a letter of warning shall be served on all the directors.
20	Change in ownership, take over or amalgamation without CBN approval.
21	Contravention of the single obligor	A fine of not less than N500,000 for the bank and
limit without CBN approval.	N100,000	with a warning letter for the approving
	officer.
22	Change	of	name	without	the	A fine of N500,000 and an immediate reversal to the
approval of the CBN.	former name. A fine of N100,000 and the immediate display of the licence/interest rate.
23	Failure to display operating licence and interest rates in a conspicuous location in the HeadOffice/Branches.
24	Failure	to	implement	the
recommendations contained in the examination report	A fine of N100,000 for each recommendation not implemented and a warning letter to the Board and Management.
25	Change of External Auditors without	A warning letter to the Board, in addition to
the approval of the CBN.	reinstating the former External Auditor.
26	Failure	to	report	Director
related credits to the CBN/NDIC.	A fine of N500,000 on the bank. In addition, the responsible officer shall be appropriately sanctioned.
27	Failure by any Director to complete	Disqualification and removal of the Director from
the code of conduct forms.	Office.	35

S/N	OFFENCES	PENALTIES
	Removal of the Director from Office.
28	Failure of any Director to comply with the Code of Conduct for Directors.
29	Holding	AGM	without	approved	A fine of N2,000,000 and a warning letter to the
audited financial statements.	bank. i) A minimum monetary penalty on each member of the Board shall be N500,000.
30	Failure to establish an Anti- Money Laundering/ Combating the Financing of Terrorism (AML/CFT) Unit/desk function	ii)	A minimum monetary penalty on the PMB on the PMB shall be N5 million.
31	Failure	to	appoint	an	AML/CFT	i)	A minimum monetary penalty on each member
compliance officer for the bank.		of the Board shall be N500,000.
	ii)	A minimum monetary penalty on the PMB on the PMB shall be N5 million.
	A monetary penalty of N2 million on the PMB.
32	Failure to render	cash transaction
returns/suspicious transactions report to Nigerian Financial Intelligence Unit (NFIU).

S/N	OFFENCES	PENALTIES
		Revocation of licence.
33	(i)	Failure	to	attain	the prescribed
minimum paid-up share capital
within the time allowed.		Revocation of licence.
(ii)	Persistent failure/refusal to render the required returns in the prescribed form for a period of six months.	Revocation of licence.
(iii) Persistent failure to comply with any other requirement of the monetary policy guidelines, provisions of the Banks and Other financial Institutions Act (BOFIA) 1991 as amended, as well as other circulars issued by the CBN for a period of twelve months.		Revocation of licence.
(iv) Engaging in activities prejudicial to the Nigerian economy.		Revocation of licence
(v) Persistent failure	to meet matured
obligations to customers.		Revocation of licence
(vi) Engaging in functions and activities outside the scope of the licence.		Revocation of licence
(vii)Any other act which in the opinion of the CBN constitutes a serious offence.

Chapter 8 General

a. The CBN shall maintain a black book for directors, officers and employees of any financial institution who commit acts relating to fraud, dishonesty and financial malpractices against their institutions. All mortgage banks are therefore, enjoined to submit the names of such officers, detailing the offences and attaching documentary evidence for the purpose of updating the black book.

b. The penalties for any breach of the provisions of these guidelines which are not expressly specified against the appropriate section of these guidelines or other regulations of the CBN shall be as set out in the relevant provisions of the CBN Act and BOFIA
c. All PMBs shall conspicuously display their operating licenses and antimoney laundering caution notices in their Head Offices and Branches d. All PMBs shall put in place complaints management processes that are easily accessible, timely and independent to address disputes that may arise from relationship with the consumers of their products.

e. This Guidelines comes into effect on January 1, 2018 while the minimum capital requirement of N15 billion takes effect from January 1, 2019.

FINANCIAL POLICY & REGULATION DEPARTMENT AUGUST 2017 QUESTIONNAIRE FOR MAJOR SHAREHOLDERS AND APPOINTEES TO BOARD AND MANAGEMENT POSITION IN BANKS AND OTHER FINANCIAL INSTITUTIONS IN NIGERIA This questionnaire is designed to elicit information which would enable the CBN ascertain your propriety as a shareholder or member of the board/top management in the institution. You are therefore, required to answer every question that relates to you honestly and where applicable, provide evidence to support your answer. Please note that the CBN would periodically request you to attend a performance review interview.

A. Biodata

Name of Institution 2. Name of the appointee/major shareholder 3. Any relationship with the institution 4. Current employment 5. Occupation 6. Date of Birth 7. Place of Birth 8. Nationality 9. Entry/resident permit (foreigners) 10. Parental history

B. Competence And Capability

Give details of educational institutions attended, academic and professional qualifications obtained with dates, in a resume format.
Give in a resume format, your:
(a) Employment history (b) Type(s) of business(es) (c) Title(s) and duties attached to it (d) Date(s) of employment (e) Name(s) of employer(s), date(s) and place(s) of the employment.

(f) Reason for leaving, position attained and two referees from former employer(s)

C. Honesty, Integrity, And Reputation

Please answer the following questions by entering a tick in the appropriate box. If answer to any of these questions is YES, use a separate sheet with proper reference to the question to provide details.

S/N	Question	Yes	No
1	Have you ever been	tried for any offence or otherwise
	found	liable by a civil, criminal	or tribunal in Nigeria or
	elsewhere, or is being subject to any pending proceedings which may lead to a conviction? If yes, please give details of the charge and if convicted, the date of conviction, particulars of the offence and the penalty imposed.
2	Have you been required to give evidence in any trial or proceedings involving fraud, dishonesty or similar matters, whether in Nigeria or elsewhere other than as an expert witness? If yes, give details.
3	Have you ever been	associated with	any illegal	activity
	concerning banking business,	deposit	taking, financial
	dealing and other business? If yes, give details.
4	Have	you	ever	been	censured,	disciplined,	warned,
	made a subject	of	public	reprimand	by a regulatory
	body,	or made the	subject	of	a	court	order	at	the
	instigation	of	a	regulatory	body	in	your	personal
	capacity? If yes, give details.
5	Have you ever served as a director in a company that was censured, disciplined, warned, made a subject of public reprimand by a regulatory body, or made the subject of a court order at the instigation of a regulatory body? If yes, give details.

S/N	Question	Yes	No
6	Have you ever been	subject	to any	findings	or any
	settlement	in civil/criminal	proceedings	particularly with
	regard	to	investments,	financial/business,	misconduct,
	examination	malpractice,	money	laundering,	fraud,
	formation or management of a corporate	body etc. by
	the	Bank,	other	regulators,	professional	bodies	or
	government bodies/agencies?	Please give details of the
	circumstances and how it was resolved (if not pending).
7	Have you ever been involved with a company or firm or other organization that has been refused registration/ licence to carry out trade, business etc? If yes, give details.
8	Have you ever been involved with a company/firm whose registration/ licence has been revoked, cancelled, or gone into liquidation or other similar proceedings? If yes, give details.
9	Have you ever been barred from being Chief Executive, Chairman, Director or Sponsor/Strategic Investor of a company? If yes, give details.

S/N	Question	Yes	No
10	Have you ever been	dismissed	or asked to resign in
	Nigeria or elsewhere in order to avoid legal or disciplinary action? If yes, give details.
11	Have	you	ever	been	denied	membership	of	any
	professional body or entry to any profession	or vocation
	whether in Nigeria or elsewhere? If yes, give details.
12	Have you ever resigned from an organization, professional or regulatory body in Nigeria or elsewhere in order to avoid legal or disciplinary action? If yes, give details.
13	Have you ever been in default of payment of dues owed to any financial institution in individual capacity or as partner in a partnership firm or in any private unlisted/listed company? If yes, give details.
14	Has any loan or credit facility (or part thereof) extended to you by any financial institution or lending agency been restructured, renegotiated, provided against or been the subject of write-off or forgiveness for reasons of nonpayment by you? If so please provide full details of the debts, the circumstances surrounding the action and the current status.

S/N	Question	Yes	No
15	Have you ever been	in default	of taxes in individual
	capacity	or	any	partnership	firm	or	in	any	private
	listed/unlisted company? If yes, give details.
16	Have you ever been	associated	as	a director or chief
	executive with a corporate body whose corporate and tax records, including custom duties, excise and value added tax, has been found unsatisfactory by the Federal Inland Revenue Services? If yes, give details.
17	Have you entered into	any agreement	with any other
	person (natural or legal) which will influence the way in which you exercise your voting rights or the way in which you otherwise behave in your relationship with the bank or holding company? If yes, give details.
18	Are you a director on the Board of Directors of any other Financial Institution(s)? If yes, give details.
19	Are you a Chairman, Chief Executive, Chief Financial Officer (by whatever name/designation called) of a Company registered by the Securities and Exchange Commission? If yes, give details.

S/N	Question	Yes	No
20	Do you own or control any other company? If yes, give details.
21	Have you	been	or are you working as consultant	or
	adviser to	the bank	or bank	parent company in	which
	you intend to become a director? If yes, give details.
22	Are you an employee of the bank? If yes, give details.
23	Are you an	employee of	a	company or organization
	whose	sponsors	or	significant	shareholders	have
	substantial interest in the bank? If yes, give details.
24	Do you have any immediate relative who holds	a top
	management	position (AGM and	above)	or significant
	shares in the institution with which this question relates or with any entity affiliated to it? If yes, give details.

S/N	Question	Yes	No
25	Is there any other information	that	is relevant for the
purpose of this evaluation? If yes, give details.

D. Financial Soundness And/Or Solvency

You are required to:
1. Forward to the CBN, a statement of your net worth comprising your assets at current values and total liabilities as at the date of appointment, which must be accompanied by a sworn affidavit; 2. Forward to the CBN, your bankers" declaration that you are not in any way indebted to them. If you are, the outstanding amount of the debts should be stated clearly indicating the performance status of the debt (performing or nonperforming) and if it is adequately secured or not as well as the nature and type of security(ies) offered; 3. Submit to the CBN, a report from at least, two Credit Bureaux registered in Nigeria in respect of you; 4. Submit to the CBN, a copy of your tax clearance certificates for the last three years; 5. Forward to the CBN, any other information that could assist it in determining your financial stability E. MISCELLANEOUS
1. Is any member of your family in any relationship with the institution to which this questionnaire relates? If so, please state the nature of the relationship.

2. Are you a serving Non-Executive Director? If yes, when were you first appointed?

3. Please state the number of board meetings you have attended since your appointment in the following format: Year Number of meetings 4. What percentage of the financial institution's shares do you currently own?

Have you been employed by an audit firm that assigned you to work on this institution's financial statements during the last two years? If so, please state the name of the audit firm:

Declaration By The Appointee

I, hereby declare that the answers to the above questions are true and that I am fully aware that any concealment, provision of false or misleading information aimed at influencing the approval of my appointment will constitute a breach of Section 60 of BOFIA, 1991, as amended. I therefore, affirm that the information supplied above (including the attachment) are to the best of my knowledge, true and where any of it is discovered to be false, I shall be disqualified from the appointment being sought and subsequent appointments by any financial institution under the purview of the CBN. Signature of Appointee/Significant Shareholder: Date WITNESSED BY (Managing Director of requesting Primary Mortgage Bank) Signature of Appointee:______________________________________________ Date:________________________________________________________________

Annexure 2

Monthly Returns

(I) Statement of assets and liabilities; (II) Income statement for the month. (III) Report on interest rates; (IV) Schedule of other liabilities; (V) Breakdown of other liabilities; (VI) Schedule of other assets; (VII) Breakdown of other assets; (VIII) Schedule of placements with banks in Nigeria; (IX) Schedule of takings from banks; (X) Schedule of takings from other financial institutions; (XI) Schedule of commercial papers; (XII) Schedule of money at call with banks; (XIII) Schedule of money at call from banks; (XIV) Schedule of placement with other financial institutions; (XV) Schedule of money at call with other financial institutions; (XVI) Schedule of money at call from other financial institutions; (XVII) Schedule of loans and advances to banks in Nigeria; (XVIII) Schedule of loans and advances from banks in Nigeria; (XIX) Schedule of loans and advances to other financial institutions in

Nigeria;

(XX) Schedule of loans and advances from other financial institutions in

Nigeria;

(XXI) Schedule of Bankers Acceptances; (XXII) Schedule of other creditors; (XXIII) Schedule of current account balances with banks in Nigeria; (XXIV) Schedule of current account balances due to banks in Nigeria; (XXV) Schedule of credit approvals and disbursement by sub-sector; (XXVI) Report on undrawn commitments; (XXVII) Fund sources and interest costs; (XXVIII) Report on deposit ownership; (XXIX) Report on lending above statutory limit; (XXX) Report on dismissed/terminated staff; (XXXI) Returns on fraud and forgeries; (XXXII) Schedule of non-interest income; (XXXIII) Schedule of non-performing credit; (XXXIV) Schedule of non-performing other assets; (XXXV) Schedule of off-balance sheet engagements [contingent

liabilities].