JUST IN: CBN revokes Heritage Bank’s licence
With immediate effect, Heritage Bank Plc's banking licence has been revoked by the Central Bank of Nigeria.
The bank's failure to enhance its financial performance, which constituted a risk to financial stability, led to this judgement.
This was revealed in a statement released on Monday by Sidi Ali, the acting director of the corporate communication department at the top bank.
Notwithstanding several supervisory actions the regulator has taken, the CBN claims that the bank's management has not been able to stop the deterioration. The CBN has taken this move to safeguard the financial system and uphold public confidence because there are no realistic prospects for recovery.
"The financial system in Nigeria is yet firmly established.
The statement went on, "This action reflects our commitment to ensuring the safety and soundness of our financial system."
In accordance with the Banks and Other Financial Act 2020, the Nigeria Deposit Insurance Corporation has been designated as the liquidator of Heritage Bank.
The CBN is viewed as having taken a major step with its action to preserve the stability of the financial system and safeguard the money of depositors. The general welfare of the financial system will not be impacted, as the public has been informed, by the cancellation of Heritage Bank's licence.
The statement said as follows: "With immediate effect, the Central Bank of Nigeria (CBN), in accordance with its duty to advance a stable financial system in Nigeria and in execution of its authority under Section 12 of the Banks and Other Financial Act (BOFIA) 2020, revokes the licence of Heritage Bank Plc.
"Because the bank violated Section 12 (1) of the BOFIA, 2020, this action has become necessary. The inability of the bank's management and board to enhance the institution's financial performance poses a risk to the stability of the financial system.
This comes after a time when the CBN interacted with the bank and suggested a number of supervisory actions meant to stop the downturn. Unfortunately, the bank has not improved and has no realistic prospects of recovery, thereby making the revocation of the license the next necessary step.
As a result, the CBN has taken this step to preserve the stability of our financial system and to bolster public trust in the banking sector.
In accordance with BOFIA, 2020 Section 12(2), the Nigeria Deposit Insurance Corporation (NDIC) is hereby designated as the bank's liquidator.
"We want to reassure everyone that the Nigerian financial system is still stable. We remain committed to taking all necessary measures to guarantee the safety and soundness of our financial system, as evidenced by the action we are taking today.
