One of Nigeria’s digital banks, whose licence was recently revoked by the Central Bank of Nigeria, Eyowo, has explained why it has been unable to resume operations even after getting clearance from the CBN.
With customers’ funds still trapped since the licence revocation, Eyowo had promised to resume operations on November 10, 2023, which would have allowed its customers to withdraw and transfer funds.
However, in a notice issued on Sunday, the company said it was unable to keep its promise because of the circumstances surrounding the resumption, which include a change of name.
According to Eyowo, the regulatory requirement to regain its operating licence was regained on October 27th.
However, the company said part of the conditions to continue operations include a change of name for its Microfinance Bank, through which it carries out banking operations
What the company is saying
Eyowo in a message sent to its customers and signed by its two CEOs, Yomi Adedeji and Seindemi Olobayo, said:
- “We must share that we fell short of our commitment to resume operations by November 10th. We completed our MFB regulatory requirements with CBN on October 27th, 2023, when we received the formal letter.
- “This effectively gave us the authorization to resume banking operations. However, this process required that ed that we carry out holistic changes in our MFB arm which powers our banking operations. These changes are heavily dependent on third-party collaborations and not completely under our time control.”
According to the company, the changes to implement before it could resume operations include a change of MFB name which is required to power its interbank transfer services; Re-listing this new name on the NIBSS interbank channel to enable its customers to transfer out of Eyowo to other banks; Re-integrating with all banks to ensure that it is listed on their channels for customers’ transactions to go through; and Applying the changes to other services; cards, PoS settlements, and transfers into Eyowo.
- “Despite our best efforts, we could not finish the necessary requirements to resume operations targeted towards the communicated date of November 10th, 2023. We apologize for the impact this has had on you, your everyday life, and your business.
- “We have stood together for this long and we appeal to you to bear with us as we cross this finish line. We are working to resolve the bottlenecks and will communicate further details with you in a timely manner going forward,” they added.
In case you missed it
The CBN had on March 23, 2023, withdrawn the microfinance licence of Eyowo, and 46 other companies. The apex bank followed with a list of another 132 Microfinance Banks, Finance Companies, and Mortgage Banks, whose licences were also revoked.
According to the apex bank, the licences of the banks were revoked because they had either remained inactive, insolvent, failed to render returns, closed shop, or ceased to carry on the type of banking business for which they were licensed for more than six (6) months.
The bank said this is in contravention of the Banks and Other Financial Institutions Act (BOFIA), 2020, and the Revised Regulatory and Supervisory Guidelines for Microfinance Banks in Nigeria.
The CBN said the various actions taken by the Regulatory Authority to halt their persistent failure to carry on business had failed, hence the decision to revoke their licence.