Central Bank of Nigeria has said it has removed the restriction on non-member mortgage lenders from refinancing their mortgages with the Mortgage Refinance Company.
The CBN said this in a circular titled ‘Regulatory and supervisory framework for the operations of a Mortgage Refinance Company approval to refinance non-member banks’ issued to all banks and other financial institutions
According to the statement, it now permits the MRCs to refinance the qualifying mortgages of lenders that do not hold its equity, subject to compliance with all other relevant provisions specified in the framework.
The circular, which was released over the weekend, was signed by the Director, Financial Policy and Regulation Department, Ibrahim Tukur.
It said the extant regulatory and supervisory framework for the operations of MRC provided in Section 126.96.36.199 that a MRC must not, without the prior approval of the CBN, extend total outstanding credit to any single borrower, which was equal to or more than 20 times the value of the borrower’s share with the MRC, or 25 per cent of its shareholders’ funds unimpaired by losses.
The provision negatively impacted the mortgage sub-sector as it constrained the MRCs from refinancing the mortgages of non-shareholder banks.