By PETER EGWUATU

The Central Bank of Nigeria  (CBN) is planning to peg the minimum capital base of a Mortgage Re-financing Company (MRC) at N5 billion.

The CBN, in a circular issued last week stated that it had approved the regulatory and supervisory framework for the operations of a MRC as an exposure draft.

“The framework provides for the licensing and establishment of a MRC as a specialised second-tier institution, which would provide short-term liquidity, long-term funding and/or guarantees to mortgage originators and housing finance lenders,” the CBN said.

According to the circular, the ultimate responsibility for the MRC’s operations shall be vested in its Board of Directors.It said, “The number of directors on the board of the MRC shall be a minimum of seven and a maximum of 15.

“The non-executive members must be at least twice the number of the executive directors at any point in time. The bank shall approve the appointment of each director, who shall meet the qualifications for licensed bank directors as specified in the Banks and Other Financial Institutions Act, or as may be specified by the bank from time to time.

“Executive directors of the MRC shall hold office for a fixed term of not more than five years, and such term may be renewed only once, while non-executive directors shall serve for a fixed term of not more than four years, and such term may be renewed only twice. For the avoidance of doubt, the maximum tenure of an executive director shall not exceed a total of 10 years, while a non-executive director shall not serve for periods exceeding 12 years in total.”

According to the new circular, any executive director who had served two five-year terms might equally serve as the managing director, if so appointed, for the maximum of two five-year terms, a combined maximum of 20 years.

The apex bank also said the procedures and criteria to be used in granting a license to a MRC would be the same as specified for banks under the BOFIA, CAP B3, Laws of the Federation of Nigeria, 2004 and any other regulations issued by the bank.