The Central Bank of Nigeria (CBN) has revoked the banking licence of Heritage Bank Plc with immediate effect, citing the bank’s persistent financial instability and breach of regulatory requirements.
The decision is part of the CBN’s mandate to maintain a sound financial system in Nigeria, as outlined under Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020.
In a press release on Monday, the CBN disclosed that Heritage Bank had failed to adhere to Section 12 (1) of BOFIA 2020, which necessitated regulatory intervention.
Despite multiple supervisory measures prescribed by the CBN to mitigate the bank’s declining financial performance, Heritage Bank has been unable to improve its financial health.
The bank’s continuous underperformance poses a significant threat to financial stability, compelling the CBN to revoke its licence.
The statement read: “The Central Bank of Nigeria (CBN), in accordance with its mandate to promote a sound financial system in Nigeria and in the exercise of its powers under Section 12 of the Banks and Other Financial Act (BOFIA) 2020, hereby revokes the licence of Heritage Bank Plc with immediate effect.
“This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020. The Board and Management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability. This follows a period during which the CBN engaged with the bank and prescribed various supervisory steps intended to stem the decline. Regrettably, the bank has continued to suffer and has no reasonable prospects of recovery, thereby making the revocation of the license the next necessary step.”
The CBN emphasized that the action is crucial to reinforce public confidence in the Nigerian banking sector and to ensure the integrity and soundness of the financial system.
The Nigeria Deposit Insurance Corporation (NDIC) has been appointed as the liquidator of Heritage Bank, in line with Section 12 (2) of BOFIA 2020.
Based on the recently adjusted maximum deposit insurance coverage levels across various banks, customers of the bank may get up to N5,000,000 payment from the NDIC, depending on the total deposits the customer has with the bank.
