The Central Bank of Nigeria has issued a warning that it will take action against banks that facilitate the activities of unregistered international companies.

This directive was outlined in the ‘Guidelines for the regulation of representative offices of foreign banks in Nigeria’, which was signed by Muhammad Musa, Director of the Financial Policy and Regulation Department, on Monday.

‘Any CBN regulated entity found to be assisting, supporting, harboring or facilitating the presence and/or operations of an unlicensed international financial institution in Nigeria shall be liable to severe sanctions including suspension or revocation of their banking licence,” it stated.

According to the guidelines, representative offices of foreign banks served an important purpose of showcasing the brand and services of its parent company.

It could also stimulate foreign direct investment to the host country by connecting capital to various investment opportunities.

“It is in view of these that the Central Bank of Nigeria issues this guideline, to specify the requirements for the licensing and operations of approved representative offices of foreign banks in Nigeria,” it stated.

The Central Bank of Nigeria (CBN) has clarified that the guidelines apply to the following entities:

• Banks incorporated under foreign law with their head office outside Nigeria.
• Financial institutions licensed under foreign law that engage in activities such as accepting deposits, granting loans, and providing current and savings accounts.
• Foreign-based banks or financial holding companies that own a controlling interest in one or more Nigerian banks or institutions that engage in similar activities.