In recent years, the Central Bank of Nigeria (CBN) has undertaken significant interventions in the banking sector to address issues of financial instability, regulatory non-compliance, and mismanagement. Notably, Keystone Bank, Polaris Bank, and Heritage Bank have experienced substantial government actions. Below is a detailed overview of these interventions:
Keystone Bank: Government Takeover and Asset Forfeiture
In January 2024, the CBN dissolved the board and management of Keystone Bank due to breaches in corporate governance. Subsequently, on February 11, 2025, the Lagos State Special Offences Court ordered the forfeiture of 6.3 billion shares of Keystone Bank, previously held by Sigma Golf Nigeria Limited and Alhaji Umaru H. Modibbo, to the Federal Government. This action followed a guilty plea by Sigma Golf in a N20 billion fraud case involving the diversion of funds from the Asset Management Corporation of Nigeria (AMCON) to acquire the bank’s shares.
The CBN assured the public that Keystone Bank remains stable and fully operational, emphasizing that the court’s decision reaffirmed its earlier intervention and that depositors’ funds are secure.
Polaris Bank: Transition and Acquisition
Polaris Bank was established in 2018 following the revocation of Skye Bank’s license due to financial instability. In October 2022, the CBN and AMCON sold 100% of Polaris Bank’s equity to Strategic Capital Investment Limited (SCIL) for an upfront payment of N50 billion, with SCIL also agreeing to repay N1.305 trillion injected into the bank by the CBN and AMCON.
Despite the acquisition, in January 2024, the CBN dissolved Polaris Bank’s board and appointed new management, indicating ongoing regulatory oversight to ensure financial stability and compliance.
Heritage Bank: License Revocation and Liquidation
Background and License Revocation
On June 3, 2024, the CBN revoked Heritage Bank’s operating license, citing persistent financial instability and breaches of banking regulations. Despite various supervisory measures and efforts to improve its performance, Heritage Bank was unable to recover, posing a threat to financial stability. Consequently, the CBN deemed the revocation of the bank’s license as a necessary step after ongoing engagements with the bank’s board and management failed to yield positive results.
Liquidation and Depositor Compensation
Following the license revocation, the Nigeria Deposit Insurance Corporation (NDIC) was appointed as the liquidator to manage the bank’s assets and liabilities. The NDIC commenced the liquidation process, assuring depositors of the safety of their funds.
Depositors with alternate accounts within the industry were to be paid up to the insured amount of N5 million per depositor using their Bank Verification Number (BVN) to locate their alternate account. Depositors with funds exceeding N5 million would be paid liquidation dividends upon realization of the bank’s assets and recovery of debts owed to Heritage Bank.
Loan Recovery Efforts
The NDIC vowed to employ all resources at its disposal to recover over N700 billion in loans and advances owed to the defunct Heritage Bank. This recovery effort was crucial to ensure that depositors with funds exceeding the insured amount could be compensated adequately.
Stakeholder Reactions
The revocation of Heritage Bank’s license elicited reactions from various stakeholders. Depositors urged the National Assembly to intervene and advise the CBN to ensure that all depositors are fully paid without delay. They proposed a similar approach to the Unity Bank and Providus Bank merger, where other financial institutions absorbed the affected depositors to facilitate a seamless transition.
Additionally, the Pan Yoruba Socio-Political Group, Afenifere, faulted the acquisition of Heritage Bank by the CBN and called for the reversal of the bank’s license revocation. They urged both the Ondo State and Federal Governments to help preserve one of the legacies of the late Chief Adekunle Ajasin by reacquiring Heritage Bank.
The Nigerian government’s recent interventions in the banking sector underscore its commitment to maintaining financial stability and enforcing regulatory compliance. While these actions have led to significant changes in ownership and management structures, the CBN continues to assure the public of the safety and soundness of the banking system.
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