The Central Bank of Nigeria (CBN) has dissolved the boards and management of Union Bank of Nigeria, Keystone Bank, and Polaris Bank due to alleged corporate governance infractions and non-compliance with regulatory requirements.
This decision follows the submission of a final report by Jim Obazee, the Special Investigator on the CBN and Related Entities, to President Bola Tinubu three weeks ago. The CBN stated that the dissolution of the boards was necessary due to non-compliance with the Bank and Other Financial Institutions Act, 2020, citing infractions such as regulatory non-compliance, corporate governance failure, disregard of license conditions, and involvement in activities posing a threat to financial stability.
In a statement by the acting Director of Corporate Communications, CBN, Sidi Hakama, the central bank emphasized that the action was taken under the provisions of Section 12(c), (f), (g), and (h) of the Banks and Other Financial Institutions Act, 2020. The infractions varied from regulatory non-compliance, failure to adhere to corporate governance standards, disregard of license conditions, and involvement in activities threatening financial stability.
The CBN assured the public that depositors’ funds are safe and secure in the country’s banking system, emphasizing its commitment to maintaining a safe, sound, and robust financial system in Nigeria. Despite claims by the Special Investigator of alleged acquisition of banks by the CBN Governor, Godwin Emefiele, the CBN maintains that the banking system is strong and resilient.
The dissolved boards are expected to be replaced, and the CBN has expressed its commitment to reconstituting the boards of other banks in the coming week. The move is part of efforts to ensure compliance with regulatory standards and enhance stability in the financial sector.
While Titan Trust Bank, which reportedly acquired Union Bank, has not been mentioned in the CBN statement, there are concerns within the banking industry about potential government intervention in Union Bank, which has been acquired by private investors led by the TGI Group. The development raises questions about the future of Union Bank and its integration with Titan Trust Bank.
The CBN’s dissolution of the boards reflects its regulatory authority and determination to uphold standards in the banking sector, with the reconstitution of boards expected to bring fresh oversight and governance to the affected banks.
