CBN reveals stance on banks’ license withdrawals

The Central Bank of Nigeria denied reports that, following the licence revocation of Heritage Bank, it intends to revoke the licences of further banks.

In a statement on Tuesday, CBN’s acting director of corporate communications, Hakama Sidi Ali, provided this explanation.

Recall when the apex bank declared on Monday that Heritage Bank’s licence had been revoked.

Customers became panicked by the development.

The country’s financial system is still robust, safe, and stable, the CBN emphasized.

The statement also stated that CBN has started to submit proposals for the recapitalization of the banking sector.

“The attention of the Central Bank of Nigeria (CBN) has been drawn to some information circulating in the public domain, suggesting that the CBN is set to revoke the licenses of three additional banks following its regulatory action against Heritage Bank Plc on Monday, June 3, 2024.

“The CBN unequivocally states that these allegations are false and intended to trigger panic in the financial system.

“The Nigerian financial system remains safe, sound, and resilient. Our banks have begun submitting implementation plans for the Banking Sector Recapitalisation Programme in compliance with the CBN Circular reviewing the minimum capital requirements for Commercial, Merchant, and Non-Interest Banks (CMNIBs). These plans are currently being reviewed by the Bank.

“In addition to enhancing buffers to withstand economic shocks, this proactive measure by the CBN to require CMNIBs to recapitalize will result in increased capital for Nigeria’s banks, enabling them to provide much-needed credit to critical sectors of the economy. This will increase the financial system’s contribution to the growth and development of a $1 trillion Nigerian economy.

“The CBN would like to reassure all stakeholders of its unwavering commitment to ensuring the financial system’s stability. Our financial system remains on a solid footing, and the CBN will continue to take all necessary steps to maintain its safety and soundness,” it stated.

Recall that in order to reach the $1 trillion economic target set by the Nigerian government, the CBN announced in April new minimum capital requirements for all Nigerian banks.

Earlier, depositors were guaranteed their money by the Nigeria Deposit Insurance Corporation, NDIC.

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