CBN Approves Short Term Loan for Skye Bank

The Central Bank of Nigeria, CBN, has affirmed its confidence Skye Bank Plc by providing a loan to boost its liquidity after the lender breached requirements on capital and lending.

This loan which was granted through a guarantee line, is to ensure that the massive withdrawals the bank suffered after the apex bank took over its management board,does not adversely affect its operations.

Analysts have opined that this recent development  lends credence to the regulator’s earlier assertion that Skye Bank is a Strategically Important Bank (SIB), with substantial market share, interconnectedness and significant relevance to the nation’s financial systems stability.

CBN confirmed this development through a statement by the CBN spokesman, Isaac Okoroafor, who said the undisclosed guarantee sum would assist the bank to shore up its liquidity and maintain its level of operations, Bloomberg reports.

“The short-term lending facility will allow the management of the bank to ensure that some withdrawals it suffered in the wake of the undue panic recently do not adversely affect its operations,” Okoroafor said.

The guarantee line is coming on the heels of CBN’s recent intervention in the bank following the voluntary resignation of the Board of Directors of the bank and the consequent re-constitution of the board with a new management team led by Mr. M. K. Ahmad and Mr. Adetokunbo Abiru, who emerged as Chairman and Group Managing Director respectively.

The CBN guarantee will not only enhance Skye Bank’s interbank trading and activities but also provide assurance to other banks to continue to deal with and trade with its instruments in the interbank market.