CBN revised guidelines set to strengthen Mortgage banking subsector

The Central Bank of Nigeria (CBN) has said that the revised guideline for primary mortgage banks designed to strengthen and complement other on going reforms in the mortgage subsector.

The apex bank said that notwithstanding the measures put in place, the mortgage subsector continued to struggle against headwinds occasioned by unfavourable macroeconomic and other developments.

The CBN revised guidelne, for the operation of primary mortgage banks issued by the bank and signed by Director, financial policy and regulation department at CBN, Ibrahim Tukur

 also said that no proposed mortgage bank shall incorporate/register its name with the Corporate Affairs Commission (CAC) until an Approval-in-Principle (AIP) has been obtained from the CBN.

It said if successful, a copy of the AIP shall then be presented to the Corporate Affairs Commission for registration.

It stated that the AIP will state conditions to be complied with for the grant of a final licence. 

The CBN according to the guidelines shall communicate the status of the application to the applicant not later than 90 days of receipt of the application.

After incorporation and opening of a corporate account, the proposed Primary Mortgage Bank (PMB) may apply for and be paid 20 per cent of its capital deposit to enable it meet its pre- operational expenses.

CBN  described  PMB  as any company that is licensed to carry out primary mortgage banking business in Nigeria, which entails granting loans directly to customers to purchase, renovate or build residential or commercial real estate.

According to the apex banking sector regulator, 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.

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