The Central Bank of Nigeria (CBN) has dismissed the boards and management of Keystone, Polaris and Union Banks this week due to a lack of compliance with banking regulations as well as corporate governance failures.
The CBN has appointed new management teams to take over at all three private banks.
This move was triggered by a report and set of recommendations from a special investigator hired by President Bola Tinubu to look into the CBN. This prompted the changes at the banks as they are regulated by the CBN.
What will happen to Keystone, Polaris and Union Bank customers’ money?
The short answer is, nothing.
Nothing is expected to change for people with deposit accounts at these banks as they have not been liquidated or declared insolvent.
It is worth remembering that this is not the first time that the CBN has sacked and appointed new management at private banks in Nigeria. In previous instances, such as Skye Bank in 2018, there was no loss of depositors’ money.
President Tinubu’s tough reforms are being driven by his bid to stop what he calls “leakages and abuse” in the financial sector. His team are looking to shore up institutions to guard against any collapse and the impact that could have on Nigeria’s economy.
The president’s plan also includes the liberalisation of the foreign exchange market to help manage the rapid fall in value of the local currency, the naira.