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CBN dissolves boards of Union Bank, Keystone Bank, & Polaris Bank

The Central Bank of Nigeria (CBN) has officially dissolved the Board and Management of three prominent banks — Union Bank, Keystone Bank, and Polaris Bank. The press release dated January 10, 2024, indicates that action was due to the banks’non-compliance with critical regulatory provisions.

The implicated provisions, Section 12(c), (f), (g), (h) of the Banks and Other Financial Institutions Act, 2020, cover a variety of regulatory and governance expectations.

The CBN cited several concerns leading to the decision, including regulatory non-compliance, failures in corporate governance, and involvement in activities threatening financial stability.

“This action became necessary because of the non-compliance of the banks and their respective boards with the provisions of Section 12(c), (f), (g), (h) of the Banks and Other Financial Institutions Act, 2020. The Bank’s infractions vary from regulatory non-compliance, corporate governance failure, disregarding the conditions under which their licenses were granted, and involvement in activities that pose a risk to financial stability, among others.” Mrs. Sidi Ali, Hakama, the Acting Director of Corporate Communications at the CBN,

The CBN’s mandate is to ensure a secure, sound, and resilient banking environment for several Nigerians. In accordance with this responsibility, the CBN reassured people that the safety and security of depositor funds remain a high priority.

The statement from Mrs. Sidi Ali, Hakama, Acting Director of Corporate Communications, emphasized the Bank’s commitment to uphold and protect the financial system within the country.

Recall last December, the Special CBN Investigator, Jim Obazee, called on Titan Trust Bank’s (TTB) chairman, Babatunde Lemo, for questioning regarding TTB’s acquisition of Union Bank of Nigeria Plc (UBN).

The special investigator had in his report alleged that some persons were used as proxies with a former CBN Governor, Godwin Emefiele, to setup Titan Trust Bank and acquire Union Bank.

However, Titan Trust Bank issued a media release denying any wrongdoing.

According to Polaris Bank, there is controversy surrounding the claims in 2022, when it had been alleged that another party made a greater purchase offer throughout the sale of the lender set alongside the offer which was eventually accepted by the central bank.

  • The central bank denied the claims, stating that the divestment from Polaris Bank was supervised with a Divestment Committee (Committee) comprising senior representatives of AMCON & CBN and supported by reputable legal and financial advisers.

The existing central bank under the leadership of Yemi Cardoso has clearly ‘stated it was investigating several alleged wrongdoings in the apex bank when it had been led by Godwin Emefiele.

A leaked report by the Special Investigation on the Central Bank of Nigeria and other entities also alleged financial and legal irregularities within the Central Bank of Nigeria (CBN) underneath the leadership of Godwin Emefiele.  

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