The Central Bank of Nigeria (CBN) has dissolved the boards and management of Union Bank, Keystone Bank, and Polaris Bank due to alleged non-compliance with the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020. The CBN cited threats to the financial stability of the system, regulatory non-compliance, corporate governance failure, and involvement in activities posing a threat to financial stability as reasons for its action.
The newly appointed executives for the affected banks are as follows:
Union Bank:
- Managing Director/Chief Executive Officer: Yetunde Oni
- Executive Director: Mannir Ubali Ringim
Keystone Bank:
- Managing Director/Chief Executive Officer: Hassan Imam
- Executive Director: Chioma Mang
Polaris Bank:
- Managing Director/Chief Executive Officer: Lawal Mudathir Omokayode Akintola
- Executive Director: Chris Onyeka Officer
The CBN emphasized that the public’s funds are safe and secure, and it remains committed to upholding a safe, sound, and robust financial system in Nigeria. The dissolution followed findings of non-compliance and other infractions committed by the affected banks. The CBN did not address the recommendation by Special Investigator Jim Obazee, appointed by President Bola Ahmed Tinubu, suggesting that the banks be forfeited to the federal government.
Background on Banks:
Union Bank:
- Established in 1917, it recently merged with Titan Trust Bank.
- The bank is owned and promoted by the owners of the TGI Group, known for investing heavily in Nigeria’s agriculture sector.
- Special Investigator Jim Obazee invited the promoters of Titan Trust Bank to meet and threatened forfeiture if they did not show up.
Polaris Bank:
- Formerly Skye Bank, it was approved for acquisition by a northern interest.
- President Muhammadu Buhari approved the acquisition, causing dissatisfaction in the southwest, which felt short-changed.
- The bank was partly owned by the Lagos State government before its acquisition.
Keystone Bank:
- Formerly one of the four largest banks in Nigeria, it was taken over by the Asset Management Corporation of Nigeria (AMCON) through a bridge bank process.
- Ownership and acquisition details are not clear.
The CBN’s action was based on non-compliance with BOFIA 2020, and specific sections related to licensing conditions, threat to financial stability, failure to comply with obligations, and critical undercapitalization.
The boards and chief executives of the banks were invited to a meeting where they were addressed by the CBN before the formal announcement of their dissolution. The issues raised reportedly included findings from the Special Investigator’s report, appointed under an Executive Order by President Tinubu to investigate the CBN and related entities.
Muhammad Ahmad, former Chairman of Polaris Bank, confirmed the dissolution and expressed readiness to defend his stewardship.
The situation adds complexity to the banking sector and raises questions about the specific violations that led to the CBN’s action.