The Central Bank of Nigeria (CBN) has categorically denied rumors that it plans to revoke the licenses of three additional banks following its recent action against Heritage Bank Plc.
In a press release dated June 4, 2024, signed by Mrs. Hakama Sidi Ali, Acting Director of Corporate Communications, the CBN stated that these allegations are unfounded and intended to cause unnecessary panic in the financial sector.
These rumors surfaced shortly after the CBN’s regulatory intervention with Heritage Bank Plc, leading to speculation about potential actions against other banks. However, the CBN has reassured the public that the Nigerian financial system remains stable and resilient.
The statement read: “The attention of the Central Bank of Nigeria (CBN) has been drawn to information circulating in the public domain, suggesting that the CBN is set to revoke the licenses of three additional banks following its regulatory action against Heritage Bank Plc on Monday, June 3, 2024.
“The CBN unequivocally states that these allegations are false and intended to trigger panic in the financial system.”
Furthermore, the statement disclosed that banks have started submitting implementation plans for the Banking Sector Recapitalisation Programme, in compliance with the CBN Circular revising the minimum capital requirements for Commercial, Merchant, and Non-Interest Banks (CMNIBs).
The CBN noted that it is currently reviewing these plans, emphasizing that the proactive recapitalization requirement is aimed at strengthening the financial system’s buffers against economic shocks and enhancing the banks’ ability to support critical sectors of the economy.
A section of the statement read: “The Nigerian financial system remains safe, sound, and resilient. Our banks have begun submitting implementation plans for the Banking Sector Recapitalisation Programme in compliance with the CBN Circular reviewing the minimum capital requirements for Commercial, Merchant, and Non-Interest Banks (CMNIBs). These plans are currently being reviewed by the Bank.
“In addition to enhancing buffers to withstand economic shocks, this proactive measure by the CBN to require CMNIBs to recapitalize will result in increased capital for Nigeria’s banks, enabling them to provide much-needed credit to critical sectors of the economy. This will enhance the financial system’s contribution to the growth and development of a $1 trillion Nigerian economy.
“The CBN would like to reassure all stakeholders of its unwavering commitment to ensuring the financial system’s stability. Our financial system remains on a solid footing, and the CBN will continue to take all necessary steps to maintain its safety and soundness.”
On June 3, 2024, the CBN revoked the banking license of Heritage Bank Plc, citing persistent financial instability and non-compliance with regulatory requirements.
In a press release, the CBN stated that Heritage Bank had failed to comply with Section 12 (1) of BOFIA 2020, necessitating regulatory intervention.
Despite various supervisory measures prescribed by the CBN to address the bank’s declining financial performance, Heritage Bank was unable to improve its financial health.
The continuous underperformance of the bank posed a significant threat to financial stability, leading the CBN to revoke its license.
Following the revocation, the Nigeria Deposit Insurance Corporation (NDIC) has initiated the liquidation process of Heritage Bank Plc. The NDIC assured depositors that they are protected, and it is currently verifying and preparing to pay customers of the bank up to N5 million, depending on their deposits.
