Banks and Other Financial Institutions Act 2020

<p>Three years (B)</p> Signup and view all the answers

<p>To ensure sufficiency for business purposes (D)</p> Signup and view all the answers

<p>Pay the prescribed licence fee (C)</p> Signup and view all the answers

<p>N20,000,000 (D)</p> Signup and view all the answers

<p>Invest them in non-interest bearing securities (D)</p> Signup and view all the answers

<p>The income is treated as income of the licenced institution (A)</p> Signup and view all the answers

<p>Vary or revoke any conditions or impose new ones (C)</p> Signup and view all the answers

<p>It is liable to a penalty of not less than N20,000,000 (B)</p> Signup and view all the answers

<p>N500,000 (C)</p> Signup and view all the answers

<p>Revocation of the bank's license. (A)</p> Signup and view all the answers

<p>Proportional to individual contributions to paid-up share capital. (D)</p> Signup and view all the answers

<p>If the holder is a minor or has a mental illness. (C)</p> Signup and view all the answers

<p>Revoke the license if certain conditions are met. (A)</p> Signup and view all the answers

<p>The license is automatically revoked. (C)</p> Signup and view all the answers

<p>The capital adequacy ratio is below the prescribed minimum. (B)</p> Signup and view all the answers

<p>Conducting business in an unsound manner. (B)</p> Signup and view all the answers

<p>The inherent rights of registered shareholders. (C)</p> Signup and view all the answers

<p>The bank's license is revoked. (D)</p> Signup and view all the answers

<p>N5,000,000 (C)</p> Signup and view all the answers

<p>Treasury bills (B)</p> Signup and view all the answers

<p>30% (B)</p> Signup and view all the answers

<p>Prior approval in writing from the Bank (B)</p> Signup and view all the answers

<p>Investment in real estate (B)</p> Signup and view all the answers

<p>Transfer at least 15% of net profits (A)</p> Signup and view all the answers

<p>It incurs an additional penalty of N100,000 for each day of contravention (C)</p> Signup and view all the answers

<p>Equal to or less than prescribed amounts (C)</p> Signup and view all the answers

<p>All identifiable losses must first be made good (C)</p> Signup and view all the answers

<p>To calculate and maintain a minimum capital adequacy ratio on a consolidated basis (A)</p> Signup and view all the answers

<p>Accepting new deposits and paying cash dividends (C)</p> Signup and view all the answers

<p>To impose additional holding actions or prohibitions (C)</p> Signup and view all the answers

<p>To hold a minimum amount as prescribed by the central bank (A)</p> Signup and view all the answers

<p>A minimum capital adequacy ratio on a consolidated basis (A)</p> Signup and view all the answers

<p>Prepare a capital reconstitution plan acceptable to the bank (C)</p> Signup and view all the answers

<p>They must be offset, and any surplus included or deducted (C)</p> Signup and view all the answers

<p>They may be excluded from a bank's demand liabilities with approval (D)</p> Signup and view all the answers

<p>Advertising for or accepting new deposits (A)</p> Signup and view all the answers

<p>Ensuring banks maintain sufficient capital to cover risks (B)</p> Signup and view all the answers

The fee a bank must pay to the Bank before they can operate in Nigeria.

The return on investment that a bank receives after depositing funds for license application.

The Bank can change the terms of a license granted to a bank.

The Bank can revoke the license of a bank if they break the terms of the license.

The Bank can set new terms for a license even after it has been granted.

A bank in Nigeria must comply with all of the terms in their license.

The Bank can decide if a bank has met all the conditions of their license.

A financial institution's obligation to repay a debt or fulfill a commitment, including potential future losses.

The ratio of a bank's capital (equity) to its assets (loans, investments). This ratio is used to assess the bank's financial strength and risk tolerance.

Any financial arrangement that allows a borrower to access funds, such as loans, overdrafts, or lines of credit.

A formal statement revealing a manager or officer's personal interest in a loan or credit facility.

Assets used as security to reduce the risk of a loan default. This can include things like property or financial instruments.

The minimum amount of capital that a bank must hold to operate, determined by the central bank. This helps ensure that banks are financially stable and can absorb potential losses.

The process of a bank being shut down and its assets being distributed to creditors.

The process of a bank ceasing to operate and its assets being distributed to creditors.

Actions or inactions that threaten the stability of the financial system, such as a bank failing, or a market crash.

The process of a newly licensed bank beginning its operations and offering banking services.

A measure of a bank's financial health, calculated as the ratio of its capital to its risk-weighted assets. This is used to assess a bank's ability to absorb potential losses.

The central bank's authority to revoke a bank's license if the bank fails to meet regulatory requirements or engages in risky practices.

The right of shareholders to vote in proportion to the amount of capital they have invested in a bank.

A bank that does not have enough capital to meet its obligations or to withstand potential losses is considered critically undercapitalized.

The ability of a bank to meet its financial obligations as they become due. It is measured by the capital adequacy ratio, which is calculated by dividing a bank's capital by its risk-weighted assets.

The Bank of Nigeria can set specific capital requirements for banks based on their risk profiles and the overall health of the financial system. This allows for greater flexibility in regulating banks with varying levels of risk.

The central bank can require banks to maintain extra capital beyond the standard requirements when it determines a particular bank faces higher than usual risks (e.g., specific investments or lending practices).

When a group of companies, including banks, are linked under a parent company, the Bank of Nigeria can require them to calculate their financial strength on a consolidated basis. Meaning that the parent company's capital is considered along with its subsidiaries' capital.

Actions that the Bank of Nigeria can take if a bank does not meet the prescribed capital adequacy ratios. These actions are designed to ensure financial stability and protect depositors.

A plan outlining how a bank intends to increase its capital to meet the prescribed ratios. It is created when a bank falls short of the required capital levels and needs to improve its financial position.

Specific types of assets that banks hold to ensure they have sufficient funds available to meet their obligations. These could include cash, government bonds, or other highly liquid instruments.

Loans that are due to be repaid over a long period, typically exceeding a year. These are considered less risky for banks because the repayment period is extended

A process where assets and liabilities owed between banks are offset. Essentially, if two banks owe each other money, the amounts are adjusted to simplify the calculation of specified liquid assets.

Banks are legally required to maintain a specified amount of liquid assets, reserves, and securities. This helps ensure the stability of the banking system and prevents excessive lending.

Banks are prohibited from increasing loans or credit facilities without prior approval from the Central Bank during periods when their required reserves fall below the prescribed level.

Banks are required to provide information to the Central Bank to demonstrate that they are complying with reserve requirements.

A mandatory fund that banks are obligated to build up overtime, contributing a percentage of their profits. This reserve helps strengthen the bank's financial position and protects against potential losses.

The minimum amount of capital that a bank must have to be operational. It represents the owner's investment in the bank and serves as a buffer against losses.

A bank licensed to operate in Nigeria.

The date when a debt, such as a bond or loan, is due to be repaid.

A bank that is subject to the guidelines and regulations outlined in the Central Bank of Nigeria Act.

The government agency responsible for regulating and supervising the Nigerian banking industry.