Some minority shareholders of the now-defunct Heritage Bank have demanded a thorough investigation into the actions of the bank’s management and directors. This call for accountability follows the recent revocation of Heritage Bank’s license by the Central Bank of Nigeria (CBN).
In a statement, the CBN cited the bank’s continuous financial decline and its failure to comply with Section 12 (1) of the Banks and Other Financial Institutions Act (BOFIA), 2020. The apex bank emphasized that despite various supervisory measures, the bank showed no prospects of recovery, posing a threat to financial stability.
NDIC Appointed as Liquidator
Following the license revocation, the CBN appointed the Nigeria Deposit Insurance Corporation (NDIC) as the liquidator of Heritage Bank, in accordance with Section 12 (2) of BOFIA, 2020.
Shareholders Demand Accountability
Boniface Okezie, National Coordinator of the Progressive Shareholders Association, emphasized the need for a probe into the bank’s management to restore confidence in the banking sector. He criticized both the CBN and the Asset Management Corporation of Nigeria (AMCON) for their roles in the bank’s prolonged insolvency.
Okezie stated, “If the bank had been insolvent for years, the CBN should have taken action sooner. AMCON should have taken over the bank since it was also paying a levy to AMCON. Instead, the CBN directed the NDIC to liquidate. This approach discourages people from using banks.”
Concerns Over Broader Banking Sector Health
Okezie questioned the stability of other banks in the sector, suggesting that if Heritage Bank could fail, other banks might also be at risk. He called for a comprehensive probe to hold those responsible accountable and recover depositors’ funds.
Calls for Investigation and Lessons Learned
Moses Igbrude, National Coordinator of the Independent Shareholders Association of Nigeria, argued for a thorough investigation into the bank’s management. He expressed concerns over the delayed response from the CBN, questioning why corrective measures took so long.
Igbrude proposed an alternative approach: “The CBN could have removed the bank’s management and installed a CBN-led team to stabilize the bank, protecting jobs and deposits. This approach would have sent a less alarming signal to the public.”
Bisi Bakare, President of the Pragmatic Shareholders Association, supported the CBN’s decision but acknowledged that shareholders would bear the brunt of the consequences. She highlighted the partial coverage for depositors while lamenting the losses faced by shareholders.
The revocation of Heritage Bank’s license and the subsequent call for a probe into its management underscore the need for transparency and accountability in the banking sector. Shareholders and industry observers stress the importance of learning from this failure to prevent similar occurrences in the future.
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Written By: Doris Chinwe Omemgbeoji