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REQUIREMENTS FOR NEW BANKING LICENCE
1. PRELIMINARY REQUIREMENTS FOR GRANT OF APPROVALIN-PRINCIPLE (AIP)
Need to make a formal application for the grant of a licence to carry on
the business of banking in Nigeria. Application should be addressed to the
Director of Banking Supervision Department, Central Bank of Nigeria,
P.M.B 0187, Garki, Abuja and submitted with the following documents:
i. Non-refundable application fee of N500,000.00.
ii Deposit of minimum capital of N 25 billion with Central Bank of
Nigeria on application with evidence of deposit by each shareholder.
The source of capital contribution by each shareholder/ subscriber
would subsequently be verified by Bank Examiners.
iii. FEASIBILITY REPORT/BUSINESS PLAN
The report should contain information on the following:
a) Minimum paid–up capital requirement of =N=25 billion for
new banking licence
b) Ownership structure in columnar format showing name of
proposed investor(s), profession/business and percentage
shareholding. Detailed bio-data/resume of shareholders
should be attached:
S Fitness and properness of the promoters would be
ascertained through security screening and status
enquiry from SEC, NDIC, NAICOM, Credit Bureau
(CRMS) and reference to CBN’s black book maintained
by the Bankers Committee.
– Explanation of the sources of capital contribution by
each investor.
– Where equity is financed by loan, such loans must be
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long term (at least of 5 year tenor) and must not be taken
from the banking system.
– Undertaking by promoters that the bank will be
adequately capitalized for the volume and character of
its business at all times.
S Foreign investors should not be companies incorporated
in off-shore centres or tax havens such as Gibraltar, The
Cayman Islands, etc
For corporate investors, promoters should forward:
– Certificate of Incorporation
– Board Resolution supporting company’s (ies) decision to
invest in the equity shares of the proposed bank.
– Names and addresses (business/residential) of
owners/directors and their related companies, if any.
– Latest 3 years audited accounts & reports of the
company and Tax Clearance Certificate.
– Certified true copy of Memorandum and Articles of
Association.
S Certified true copies of the companies forms CO2 and
CO7
c) Objectives of the bank.
d) Services to be rendered.
e) Branch expansion programme
f) Organizational structure, showing functional units, reporting
relationships and grade (status) of heads of
departments/units.
g) Staff Training Programme
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h) I. T. Programme requirements/facilities.
i) Five (5) year financial projection. The assumptions underlying
the projections must be stated.
iv. BOARD & MANAGEMENT
a) Board
– Board composition should not be unwieldy (10-20
directors)
– Roles and responsibilities of the Board & its subcommittees must be spelt out in the business plan.
S Criteria for selecting board members should be stated in
Business Plan. This must be proportional to
shareholding.
S List of proposed directors and their detailed resume
should be submitted
b) Management Team
List of identified top / senior management staff (AGM and
above) and detailed curriculum vitae stating their qualification
and experience, track records etc should be submitted.
* See Circular ref. BSD/DO/CIR/VOL.I/01/2001 dated
January 4, 2001 on the “pre-qualification for
appointments into the Board and top management
positions in Nigerian banks.”
c) Organizational structure, showing functional units,
responsibilities, reporting relationships and grade (status) of
heads of department/unit.
d) Internal Controls
– Delegation of functions
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– Need for involvement of four eyes (i.e. at least two
officers to be involved in all major decisions) in running
the bank.
Dual Control. No sole signatory powers
– Succession plan for key officers
– Corporate planing
v. MEMORANDUM AND ARTICLES OF ASSOCIATION (MEMART)
Relevant issues to be addressed in the draft MEMART include, but
are NOT limited to:
a. Name of proposed bank.
b. Object clauses
c. Subscribers to the MEMART
d. Procedure for amendment
e. Procedure for share transfer/disposal
f. Appointment of directors
vi. OTHER DOCUMENTS
a. Shareholders Agreement providing for Disposal/transfer of
shares as well as authorization, amendments, waivers,
reimbursement of expenses etc.
b. Statement of intent to invest in the bank.
c. Technical Services Agreement (where applicable).
a. Any other documents/information that may be demanded
from time to time.
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2. REQUIREMENTS FOR GRANT OF FINAL LICENCE:
Not later than six (6) months after the grant of A.I.P, the promoters
of a proposed bank must submit application for the grant of a final
banking license to the DBS with following documents:
– Non-refundable licensing fee of N5,000,000 in bank draft
payable to CBN.
– 3 copies each of:
– Certified true copy (CTC) of Certificate of Incorporation
of the bank.
– CTC of MEMART
– CTC of Forms CO2 (Allotment of shares) and CO7
(particulars of directors).
S Evidence of location of Head Office/Branch Building (rented or
owned) for the take-off of banking business.
– Changes (if any) in the Board, Management and Shareholding
should be clearly stated for necessary appraisal.
– Evidence of strongroom, loading bay and Banking Hall
Facilities.
– Bullion lorries with necessary security gadgets.
– Evidence of installation I.T. facilities/computerization.
– Copies of letters of offer and acceptance of employment in
respect of the Management Team.
3. PRE-COMMENCEMENT OF OPERATION REQUIREMENTS
Letter informing CBN of its readiness to commence operation with
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the following:
– Evidence of admission into the clearing house.
– Copy of shareholders register
– Copy of share certificate issued to each investor.
– Draft copy of opening statement of affairs signed by directors
and auditors.
– Evidence of insurance coverage for cash such as Cash-InTransit (CIT), Cash on Counter, Strongroom/ Vault, etc,
insurance policies.
– Manual of Operation.
– Evidence of readiness of cheques and other security
documents.
– Minutes of Pre-Commencement Board Meeting.
– Evidence of adequate security arrangements – physical and
logical such as:
a Uniformed and/or plain cloth policemen
b Uniformed security guards
c CCTV especially in the banking hall, strongroom and loading
bay areas
d Raid alarm (especially foot operated type) inside the teller
cubicles, and fire alarms at strategic points within the
premises
e Regiscope camera
f Cash movement & escort vans fitted with communication
equipment
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