CBN Bans Heritage Bank, Revokes Its License

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CBN Bans Heritage Bank, Revokes Its License
CBN Bans Heritage Bank, Revokes Its License

Heritage Bank Plc’s banking licence has been immediately revoked by the Central Bank of Nigeria because the bank has not improved its financial performance, endangering the stability of the financial system.

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.

CBN discloses in a statement that “The Nigerian financial system remains on a solid footing.

Continuing, “We are committed to ensuring the safety and soundness of our financial system, and this action reflects that commitment,” it added.

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 banking and finance news shows that 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 CBN’s statement read, “The Central Bank of Nigeria (CBN), following its mandate to promote a sound financial system in Nigeria and exercise of its powers under Section 12 of the Banks and Other Financial Act (BOFIA) 2020, hereby revokes the licence of Heritage Bank Plc with immediate effect.

“This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020. The Board and Management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial
stability.

Furthering, “This follows a period during which the CBN engaged with the bank and prescribed various supervisory steps intended to stem the decline. Regrettably, the bank has continued to suffer and has no reasonable prospects of recovery, thereby making the revocation of the license the next necessary step.

“Consequently, the CBN has taken this action to strengthen public confidence in the banking system and ensure that the soundness of our financial system is not impaired.

“The Nigeria Deposit Insurance Corporation (NDIC) is hereby appointed as the liquidator of the bank under Section 12 (2) of BOFIA, 2020.

“We wish to assure the public that the Nigerian financial system remains on a solid footing. The action we are taking today reflects our continued commitment to take all necessary steps to ensure the safety and soundness of our financial system,” it added.