Victor EzejaThe Central Bank of Nigeria (CBN) has revoked Heritage Bank’s operating licence, citing poor performance which threatens the financial system stability.
In a statement released on Monday, signed by Hakama Sidi Ali, Acting Director, Corporate Communications, CBN, the apex bank said the decision to revoke the commercial bank’s licence was in accordance with its mandate to promote a sound financial system in Nigeria.
Join our WhatsApp ChannelThe statement said Heritage Bank had breached Section 12 (1) of the Banks and Other Financial Institutions Act (BOFIA) 2020.
Mrs Ali said the revocation is with immediate effect, explaining that the CBN had previously engaged with the bank and prescribed some steps to reverse the situation but has continued to suffer decline and currently has no reasonable prospects of recovery.
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“The Central Bank of Nigeria (CBN), in accordance with its mandate to promote a sound financial system in Nigeria and in 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,” part of the statement read.
“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.
“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.”
The CBN said the action of revoking the licence was taken “to strengthen public confidence in the banking system and ensure that the soundness of our financial system is not impaired.”
It further stated that the Nigeria Deposit Insurance Corporation (NDIC) has been appointed as the Liquidator of the bank in accordance with 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,” the CBN further stated.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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