Union, Keystone, Polaris boards sacked due to infractions

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The Central Bank of Nigeria has said that the boards of Union Bank of Nigeria, Keystone Bank and Polaris Bank were dissolved over infractions.

In a statement signed by its acting Director, Corporate Communications, Sidi Hakama, on Wednesday, the apex bank said that the action became necessary as their actions posed a threat to financial stability.

The statement said, “The Central Bank of Nigeria has dissolved the Board and Management of Union Bank, Keystone Bank, and Polaris Bank.

“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 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 licences were granted, and involvement in activities that pose a threat to financial stability, among others.”
The apex bank assured the public of the safety and security of depositors’ funds while saying it remains resolute in fulfilling its mandate to uphold a safe, sound, and robust financial system in Nigeria while maintaining, “Our Banking system remains strong and resilient.”

Section 12 of the BOFIA 2020 quoted by the apex bank as the basis for the dissolutions of the board deals with the revocation of a banking licence and the conditions under which it can happen.

The affected portion of the Act read, “12.⁠ ⁠(1) Notwithstanding the provisions of this Act or any other law, the Governor may, with the approval of the Board and by notice published in the Federal Government Gazette, or print and electronic media, revoke any licence granted under this Act if a bank-

“(c) fails to fulfil or comply with any condition subject to which the licence was granted

“(f) is involved in a situation, circumstance, action or inaction which constitutes a threat to financial stability;

“(g) fails to comply with any obligation imposed upon it by or under this Act, or the Central Bank of Nigeria Act or any other rule, regulation, guideline or directive made hereunder;

“(h) is, in the opinion of the Bank critically undercapitalised with a capital adequacy ratio below the prudential minimum or such other ratio as the Bank may prescribe.”

The dissolution of the boards comes days after the Special Investigator of the apex bank, Jim Obazee, claimed that some banks were acquired by a former governor of the bank, Godwin Emefiele, using proxies.

The FG was thus advised to take over the banks, strengthen them and sell them off.

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