Heritage Bank’s Licence Revocation Shouldn’t Worry Anyone, Says Moghalu
A former deputy governor of the Central Bank of Nigeria, Kingsley Moghalu, on Wednesday, said the recent revocation of Heritage Bank Plc’s banking license by the apex bank should not “worry” anyone.
Moghalu described the revocation of the bank’s license as the chronicle of a death foretold, adding that the move was not surprising.
“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,” he said in a statement on X.
According to the former presidential aspirant, the apex bank’s license revocation was to protect depositors’ funds, and maintain confidence in the banking system.
“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.
To Moghalu, 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.
On Monday, the CBN revoked the operating licence of Heritage Bank effective immediately.
The apex bank in a statement on Monday by its acting Director of Corporate Communication Department, Sidi Ali, said the decision was made because the bank failed to improve its financial performance, and posed a threat to financial stability.
Thereafter, 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.
