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Revocation Of Heritage Bank’s Licence Shouldn’t Worry Anyone – Moghalu

A former Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has said the recent revocation of Heritage Bank Plc’s banking license by the CBN should not worry anyone.

Moghalu’s statement comes two days after the apex bank revoked the banking licence of the bank effective immediately.

The CBN, in a statement on Monday by its acting Director of Corporate Communication Department, Sidi Ali, said the decision was made because the bank’s failure to improve its financial performance posed a threat to financial stability.

Consequently, the Nigeria Deposit Insurance Corporation said it had commenced the liquidation of Heritage Bank Plc and assured all that it would pay depositors of the failed bank N5 million insured deposits.

The NDIC’s Director of Communication and Public Affairs, Bashir Nuhu, in a statement on Monday, said the liquidation is in accordance with Section 55 Sub-sections 1 & 2 of the NDIC Act 2023.

In a statement via X on Wednesday, Moghalu described the revocation of the bank’s license as the chronicle of a death foretold, adding that the move was not surprising.

The former presidential aspirant asserted that the apex bank’s license revocation was to protect depositors’ funds and maintain confidence in the banking system.

“The revocation of the banking license of Heritage Bank by @cenbank is the chronicle of a death foretold. In other words, it’s not surprising.

“I don’t think it should worry anyone, nor does it mean the financial system isn’t sound. Banks are businesses, even if very special and thus heavily regulated ones. A bank that is badly run should not have a lifetime guarantee. The important thing is to protect depositors’ funds,” he stated.

Recalling his time at the apex bank, Moghalu stated that the Asset Management Corporation of Nigeria was established to ensure systemic financial stability and guard against bank failure.

“What we did in 2010 when we created @AmconNg was to ensure SYSTEMIC financial stability. We made sure no bank failed then to ensure systemic stability because of the unique situation of the global financial crisis. But over the long term, I never subscribed to a view that no bank, no matter how badly run, should ever fail. That would be a wrong approach to financial regulation,” he added.

In a related development, the CBN denied on Tuesday plans to revoke the licenses of Unity Bank, Polaris Bank, and Keystone Bank.

Reports indicated that the apex bank would terminate the licenses of the three banks following the revocation of Heritage Bank’s license.

However, the CBN has debunked this claim in a post on its social media handles, stating that it has no plans to do so.

“The content is fake and not from the CBN,” the apex bank had said.

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