The Central Bank of Nigeria (CBN) has revoked the licence of Heritage Bank Plc due to ongoing poor financial performance. The decision, effective immediately, was made under Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020.
According to the CBN, this
measure was necessary due to Heritage Bank’s inability to comply with financial
stability requirements as outlined in Section 12 (1) of BOFIA. Despite various
supervisory interventions and efforts to assist the bank in improving its
financial standing, the bank's performance continued to deteriorate, posing a
significant threat to the stability of Nigeria’s financial system.
The CBN has been engaging with
Heritage Bank over a period, prescribing several steps intended to mitigate the
decline. However, the bank showed no reasonable prospects of recovery,
prompting the CBN to revoke its licence.
In its announcement, the CBN
emphasized that this action was crucial to maintaining public confidence in the
banking sector and ensuring the overall soundness of the financial system. To
manage the aftermath of this revocation, the Nigeria Deposit Insurance
Corporation (NDIC) has been appointed as the liquidator, as stipulated by
Section 12 (2) of BOFIA 2020.
The CBN reassured the public
that Nigeria’s financial system remains stable and robust. The move to revoke
Heritage Bank's licence underscores the CBN’s commitment to taking all
necessary actions to safeguard the financial system's integrity and soundness.
This development reflects the
CBN's ongoing efforts to ensure that banks operating within Nigeria adhere to
the required financial standards and practices, thus protecting the interests
of depositors and maintaining the overall health of the financial sector.
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