CBN Shakes Financial Landscape: Boards Axed at Union Bank, Keystone Bank, and Polaris Bank

In a significant move, the Central Bank of Nigeria (CBN) has formally dissolved the Board and Management of three major banks—Union Bank, Keystone Bank, and Polaris Bank. This decisive action, announced in a press release dated January 10, 2024, stems from the banks’ failure to adhere to crucial regulatory provisions.

The regulatory provisions implicated in this dissolution, specifically Section 12(c), (f), (g), (h) of the Banks and Other Financial Institutions Act, 2020, encompass a spectrum of regulatory and governance expectations. The CBN, in justifying its decision, pointed to a range of concerns, including regulatory non-compliance, lapses in corporate governance, and participation in activities that pose a threat to financial stability.

Mrs. Sidi Ali, Hakama, the Acting Director of Corporate Communications at the CBN, stated, “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.”

The CBN, mandated to ensure a safe, sound, and resilient banking environment for all Nigerians, reassured the public that the safety and security of depositor funds remain a top priority. In her statement, Mrs. Sidi Ali, Hakama, emphasized the Bank’s commitment to upholding and protecting the financial system within the country.

Providing context to the recent development, it’s worth noting that in December of the previous year, the Special CBN Investigator, Jim Obazee, summoned Titan Trust Bank’s (TTB) chairman, Babatunde Lemo, for questioning regarding TTB’s acquisition of Union Bank of Nigeria Plc (UBN). Obazee’s report alleged that certain individuals acted as proxies for a former CBN Governor, Godwin Emefiele, in establishing Titan Trust Bank and acquiring Union Bank. Titan Trust Bank, however, issued a press release vehemently denying any wrongdoing.

The controversy surrounding Polaris Bank dates back to 2022 when allegations surfaced that another party had submitted a higher purchase offer during the bank’s sale compared to the offer eventually accepted by the central bank. The central bank refuted these claims, asserting that the divestment from Polaris Bank was overseen by a Divestment Committee comprising senior representatives of AMCON & CBN and supported by reputable legal and financial advisers.

Providing additional context, the current central bank, led by Yemi Cardoso, has explicitly stated that it is investigating several alleged wrongdoings during the tenure of Godwin Emefiele as the apex bank’s governor.

In conclusion, Infostride News has been monitoring these developments closely as the banking landscape undergoes significant shifts, prompting heightened scrutiny and investigations by regulatory authorities.