CBN Dissolves the Board and Management of Union Bank, Polaris Bank and Keystone Bank
The Central Bank of Nigeria (CBN) has dissolved the Union Bank, Keystone Bank and Polaris Bank boards (see 1. below).
The boards of the affected banks were dissolved after a meeting with the leadership of CBN in Abuja.
On Thursday, January 11, 2024, the CBN released a January 10, 2024 presser indicating that it had appointed new executives for Union Bank, Keystone Bank and Polaris Bank (see 2. below).
The CBN cited several concerns leading to this decision, including regulatory non-compliance, failures in corporate governance, and involvement in activities threatening financial stability.
- “This action became necessary due to the non-compliance of these banks and their respective boards with the provisions of Section 12(c), (f), (g), (h) of 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 threat 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 safe, sound, and resilient banking environment for all Nigerians. In line with this responsibility, the CBN reassured the public that the safety and security of depositor funds remain a top priority.
:Of Bank Board Dissolutions and Matters Arising:
However , the decision by the apex bank without the needed clarity on the underlying transactions that informed the decision (as a market learning signal) and the role of the special investigator hascontinued to raise questions . These questions include whether the three banks now ‘nationalized’,who owns the bank’s equity if (1) holds true? , the role of the established entities for bank takeovers within the established laws under the present arrangement, how long will these entities function without a substantive board, who/which entity in the CBN is responsible for the ‘operational’ efficiency of these financial entities?
