Sylvia Duruson
Central Bank of Nigeria (CBN) has revoked the operating license of Heritage Bank due to a breach of Section 12(1) of the Banks and Other Financial Institutions Act 2020. The apex bank cited the bank’s continuous financial struggles and lack of visible prospects for recovery as the primary reasons behind the revocation.
According to the CBN statement, the decision was taken to maintain confidence in the country’s financial system. The bank had been engaging with Heritage Bank and prescribed various supervisory measures to stem the decline, but the efforts proved futile as the bank’s financial condition continued to deteriorate.
Section 12(1) of the Act empowers the CBN to revoke a financial institution’s license if it fails to meet certain conditions, including being critically under-capitalized, posing a threat to its financial stability, conducting business in an unsound manner, or having insufficient assets to meet its liabilities.
Reports from local media outlets suggest that Heritage Bank had been seeking strategic investors for nearly five years without success. A former executive of the bank revealed that potential investors had been retracting after examining the bank’s financial records, citing high indebtedness as a significant deterrent.
In recent weeks, Heritage Bank customers had reported difficulties accessing their deposits, although the bank attributed the issue to a system refresh exercise. However, the problems persisted even after the exercise, raising concerns about the bank’s liquidity position.
The CBN’s decision to revoke Heritage Bank’s license underscores the regulator’s commitment to maintaining a stable and resilient financial system. The move aims to protect the interests of depositors and ensure public confidence in the banking sector.
As the situation unfolds, further details regarding the resolution process and the impact on Heritage Bank’s customers and employees are expected to emerge in the coming days.
