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CBN Takes Decisive Action: Dissolves Boards of Union Bank, Keystone Bank, and Polaris Bank Over Regulatory Non-Compliance

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In a significant move aimed at safeguarding the stability of the Nigerian financial system, the Central Bank of Nigeria (CBN) has announced the dissolution of the Board and Management of Union Bank, Keystone Bank, and Polaris Bank. This decision comes as a result of the banks and their respective boards’ non-compliance with the provisions of Section 12(c), (f), (g), (h) of the Banks and Other Financial Institutions Act, 2020.

The CBN cited various infractions by the affected banks, including regulatory non-compliance, corporate governance failures, disregard for the conditions under which their licenses were granted, and involvement in activities deemed to pose a threat to financial stability.

“The action taken by the Central Bank of Nigeria is a necessary step to address the significant concerns surrounding the operations of Union Bank, Keystone Bank, and Polaris Bank,” stated Sidi Ali Hakama, Ag. Director of Corporate Communications at the CBN. “These banks have unfortunately fallen short of the standards set by the regulatory framework, and their actions have raised serious questions about their ability to operate in a manner that ensures the stability of the financial system.”

The CBN emphasized that the dissolution was not taken lightly and is part of its commitment to upholding the integrity and reliability of the banking sector. Despite this regulatory intervention, the Central Bank assures the public of the safety and security of depositors’ funds, emphasizing that the banking system remains strong and resilient.

“The Central Bank of Nigeria remains resolute in fulfilling its mandate to uphold a safe, sound, and robust financial system in Nigeria. We will take all necessary measures to address any challenges that may arise and maintain the trust and confidence of the public in the banking sector,” added Hakama.

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The CBN has indicated that a transitional process will be put in place to ensure the seamless continuation of banking operations during this period. The regulatory body is also expected to conduct a thorough investigation into the actions of the dissolved boards and management to determine the extent of their infractions and whether further legal actions are warranted.

This development underscores the Central Bank’s commitment to maintaining a stable and well-regulated financial environment, promoting good governance within financial institutions, and protecting the interests of depositors and investors in the Nigerian banking sector.

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