Members of the minority shareholders community have called for a probe of the directors and management of the failed Heritage Bank. The call resulted from CBN’s revocation of the bank’s license.
While announcing the license revocation, CBN said, “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, 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 recovery prospects, thereby making revoking the license the next necessary step.”
In line with Section 12 (2) of BOFIA, 2020, CBN has appointed the Nigeria Deposit Insurance Corporation as the liquidator of Heritage Bank.
According to Boniface Okezie, the National Coordinator of the Progressive Shareholders Association, probing bank managers will effectively boost confidence in the banking sector.
He further questioned the role of AMCON and why the apex bank refused to take over at the sight of insolvency. He stated that the CBN directive to take over for liquidation would discourage people from using banks, citing practical examples.
He said someone has N20m in the bank, and you pay them N5 m until the bank’s assets have been assessed and liquidated. He concluded by saying Heritage Bank might not be the only bank not meeting the required standard for a financial institution.
Therefore, those who ran the bank aground should be called for questioning, not just NDIC liquidating.
In response, Bisi Bakare, President of the Pragmatic Shareholders Association, remarked, “The CBN has taken the right step on it. The depositors are a bit covered. It is only the bank’s shareholders who will suffer for it.”
