In support of this initiative, the Central Bank of Nigeria (CBN) has decided to develop this Regulatory and Supervisory Guidelines to provide a level playing field for participants in the Development Financing subsector and to further direct private capital to participating financial institutions (PFIs). This Guidelines will provide a framework for licensing, regulation and supervision of both WDFI and Retail DFI (RDFI). Rather than compete directly with RDFI at the retail market, WDFI shall mainly provide wholesale financial products (at least 80 percent of total credit) and facilitate technical assistance to eligible participating financial institutions (PFIs) throughout Nigeria. As with all financial institutions regulated by the CBN, DFIs shall be subject to regulation and supervision by the CBN under the Banks and Other Financial Institutions Act, CAP B3, Laws of the Federation of Nigeria, 2010 (herein after referred to as “BOFIA”). While it is recognized that some DFIs were set up by specific Acts of the National Assembly, it should be noted that all DFIs have been brought under the CBN’s regulatory purview by virtue of subsequent amendment to BOFIA in 1999. These guidelines are designed to be consistent with CBN’s existing regulations for all licensed financial institutions and to ensure that DFIs operate in a safe and sound manner.
The guidelines are arranged in twelve sections, beginning with definitions and objectives of DFIs, followed by powers and duties of the CBN with respect to the operations of DFIs. The third and fourth sections highlight the permissible and non-permissible activities, and the licensing procedure and requirements, respectively. The fifth section deals with corporate governance requirements, while section six focuses on sources of funds for DFIs. Section seven and eight provide for rendition of statutory returns and prudential requirements, respectively. Other regulatory approvals, on-site examination and off-site surveillance, and administrative sanctions and actions are covered under sections nine, ten and eleven, respectively. Section twelve itemizes the annexures to the guidelines.