The Central Bank of Nigeria has issued a crucial warning to the public about an unauthorized financial institution operating illegally across multiple states in the country.
Illegal Banking Operations Uncovered
In an official statement released by Hakama Sidi Ali, the Acting Director of Corporate Communications, the CBN exposed Zuldal Microfinance Bank Limited as an unlicensed entity conducting banking activities without authorization. According to the apex bank, this fake institution has been operating branches in Lagos, Abuja, Kaduna, and Kano while falsely claiming to possess a CBN-issued licence.
The CBN clarified that Zuldal Microfinance Bank is not licensed to operate any banking or microfinance business in Nigeria and has no authorization to conduct financial activities in the country. The regulatory body emphasized that anyone who engages in financial transactions with this organization does so at their own risk.
Growing Threat of Fake Financial Institutions
This exposure comes amid Nigeria's ongoing drive for financial inclusion, which has unfortunately led to the emergence of fake financial institutions posing as genuine banks. While the CBN has licensed 737 microfinance banks across Nigeria to provide services to low-income individuals and small businesses, illegal operators continue to exploit the system.
These legitimate microfinance banks offer crucial financial services including loans, savings accounts, insurance products, and fund transfers to millions of Nigerians, particularly targeting micro, small, and medium enterprises (MSMEs) that form the backbone of the Nigerian economy.
How to Verify Legitimate Financial Institutions
The Central Bank has provided clear guidelines for establishing legitimate financial institutions in Nigeria. To obtain a banking licence from the CBN, applicants must provide comprehensive documentation including:
- Curriculum vitae of all beneficial owners
- Detailed shareholding structure of the institution
- Incorporation documents for corporate shareholders
- Completed beneficial ownership declaration forms
- Evidence of capacity to screen customers for money laundering and terrorism financing risks
- Proof of ability to monitor and submit suspicious transaction reports
The CBN maintains an updated list of all approved microfinance banks on its official website, which includes institutions such as AACB Microfinance Bank Limited, AB Microfinance Bank Limited, Accion Microfinance Bank Limited, and over 700 other licensed operators.
Nigerians are advised to always verify the licensing status of any financial institution before engaging in transactions to protect their funds and personal information.
