The Central Bank of Nigeria (CBN), in a seismic move, has abruptly dissolved the boards and managements of Union Bank of Nigeria, Keystone Bank, and Polaris Bank.
This drastic action follows allegations of corporate governance infractions and regulatory non-compliance.
The decision, reportedly influenced by a recently submitted report from Special Investigator Jim Obazee, stresses the banks’ non-compliance with the provisions of the Bank and Other Financial Institutions Act, 2020.
The alleged infractions range from corporate governance failures to activities threatening financial stability.
The CBN, in a statement, reassured the public of the safety of depositors’ funds, underscoring its commitment to maintaining a secure financial system.
The dissolution of the boards comes amidst claims from the Special Investigator, Obazee, suggesting that the banks were acquired by Emefiele using fronts, recommending a government takeover for strengthening and subsequent sale.
Section 12 of the BOFIA 2020 forms the basis for this move, citing conditions for the revocation of a banking license. The affected banks’ failure to comply with regulatory requirements and other infractions triggered the CBN’s intervention.
“This action became necessary due to the non-compliance of these banks and their respective boards with the provisions of Section 12(c), (f), (g), (h) of Banks and Other Financial Institutions Act, 2020. The banks’ infractions vary from regulatory non-compliance, corporate governance failure, disregarding the conditions under which their licences were granted, and involvement in activities that pose a threat to financial stability, among others,” the CBN stated.
While Titan Trust Bank’s fate remains unaddressed in the CBN statement, speculation arises concerning its potential involvement, especially as the bank reportedly acquired Union Bank.
The PUNCH reports that the dissolution will impact over 30 board chairmen, managing directors, and directors across the three banks.
The CBN is expected to swiftly reconstitute new boards within the week, leaving the banking sector in anticipation of further developments. This unprecedented move raises questions about the overall stability of Nigeria’s financial institutions, making it a pivotal moment for the nation’s banking landscape.
