CBN Reveals Shocking Reasons Behind Heritage Bank License Revocation

The Central Bank of Nigeria (CBN) revoked Heritage Bank's operating license Wednesday, citing the bank's board of directors' inability to enhance the bank's financial performance.

The Nigeria Deposit Insurance Corporation, or NDIC, announced that it has started the bank's liquidation process and that it will pay each depositor's guaranteed amount of N5 million.

"The Central Bank of Nigeria (CBN), by 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, at this moment revokes the license of Heritage Bank Plc with immediate effect," said Hakama Sidi Ali, Acting Director, Corporate Communications, CBN, in a statement announcing the decision of the apex bank to revoke the bank's license.

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"Because the bank violated Section 12 (1) of the BOFIA, 2020, this action has become necessary. The bank's board and management need to be able to enhance the bank's financial performance to maintain the financial system's stability.

This comes after a time when the CBN interacted with the bank and suggested some supervisory actions meant to stop the downturn. Unfortunately, the bank has not improved and there are no realistic chances that it will, thus the next required step is to revoke the license.

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As a result, the CBN has taken this step to preserve the stability of our financial system and to bolster public trust in the banking sector.

In line with BOFIA, 2020 Section 12(2), the Nigeria Deposit Insurance Corporation (NDIC) is therefore designated as the bank's liquidator.

"We want to reassure everyone that the Nigerian financial system is still stable. We remain committed to taking all necessary measures to guarantee the safety and soundness of our financial system, as evidenced by the action we are taking today."

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