The Central Bank of Nigeria (CBN) on Wednesday moved to reassure bank customers unsettled by last Monday’s decision to take over the management of Skye Bank.
The CBN had forced the resignation of members of the bank’s board and management team, in what it called “proactive and unavoidable regulatory step to forestall the bank from falling into distress”.
The CBN said Skye Bank had persistently failed to meet minimum thresholds in critical “prudential and adequacy ratios”, culminating in its permanent presence at the CBN lending window.
Since the decision, bank customers have been engaging in panic withdrawals from their accounts in various banks across the country apparently in response to speculations that the country’s entire banking system was at the verge of imminent crash.
The speculations were fuelled by reports that the takeover of Skye Bank was the first of 11 banks penciled for similar action by CBN for alleged massive breaches of financial regulations guiding their operations.
Early this year, CBN in a memo signed by Benjamin Olakunle on behalf of its Director of Banking Supervision to managing directors and chief executives of banks expressed its displeasure at the massive abuses by the banks through insider related loans/credits that have driven non-performing loans portfolios to unprecedented levels.
Although the affected banks were given till December to reconcile their credit records, the decision to swoop on Skye Bank has triggered intense panic in the sector.
In a statement on Wednesday by its acting director, Corporate Communications, Isaac Okorafor, the CBN reassured bank customers that there was no truth in speculations making the rounds that the country’s banks may have gone or may be going into distress.
The CBN described the speculations as “malicious rumours and unfounded”, saying the country’s banks were financially heàlthy and strong.
“The CBN wishes to reiterate in the strongest terms that these rumours and speculations are untrue and do not reflect the actual health of the individual banks and, indeed, the entire banking industry.
“For the avoidance of doubt, the infusion of a new Board and Management for Skye Bank PLC is a proactive regulatory action meant to ensure that the bank does not continue to fail in its relevant prudential ratios.
“Neither Skye Bank nor any other bank in the industry is in distress. Therefore, the CBN would like to request the general public to ignore speculations or rumours to the contrary as they could only be the handiwork of mischief makers who do not mean well for the Nigerian banking system and its economy,” Mr. Okorafor said.
The CBN said as the regulator of the country’s banking industry, the general public was reassured that their deposits remained safe in any of the banks.
“Going by both the CBN’s Examination Reports as well as analysis from market watchers, International Credit Rating Agencies, and Development Finance Institutions, the Nigerian banking industry remains strong in spite of the global economic challenges emanating from the collapse of global commodity prices,” the CBN said.
Insisting the situation did not demand panic withdrawals from any bank, the CBN urged the banking public to remain calm and go about their normal businesses without panic to avoid creating problems that did not exist.