The Central Bank of Nigeria has immediately annulled the banking licence of Heritage Bank Plc.
The apex bank’s Acting Director of Corporate Communication Department, Sidi Ali, disclosed this decision some hours ago.
This decision was made due to the bank’s failure to improve its financial performance, posing a threat to financial stability.
Reports have it that the bank’s management has been unable to stem the decline despite various supervisory steps taken by the regulator. With no reasonable prospects of recovery, the CBN has taken this action to protect the financial system and maintain public confidence.
The Central Bank of Nigeria (CBN), keeping its mandate to galvanise 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.
A statement from the CBN reads:
“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.
“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.”
The Nigeria Deposit Insurance Corporation (NDIC) has been tasked as the liquidator of Heritage Bank, in line with Section 12 (2) of BOFIA 2020.
Recall that the maximum deposit insurance coverage levels were raised across various banks, customers of the bank may get up to N5,000,000 payment from the NDIC, depending on the total deposits the customer has with the bank.
