Nigerian House of Representaives in Session

Regulatory Affairs: Legislators direct CBN to suspend sale of Polaris Bank

*The House of Representatives rules the suspension of the process is required to prevent public outcry and unfavourable response from important economic stakeholders, including international business partners, banking sector, depositors, and correspondent banks

Isola Moses | ConsumerConnect

Citing potential issues of accountability and transparency amid rumours of corruption, the House of Representatives, in the National Assembly (NASS), Abuja, FCT, has directed the Central Bank of Nigeria (CBN) to immediately halt the sale of Polaris Bank Limited.

ConsumerConnect learnt that the House Wednesday, October 12, 2022, ruled that the suspension should stay until the Asset Management Corporation of Nigeria (AMCON) and  Nigeria Deposit Insurance Corporation (NDIC) have completed all procedures for an “open, transparent, and competitive bid process”.

The Green Chamber of NASS also stated this should be in accordance with best practices and protocol for divestments of this kind.

After the plenary Wednesday, Hon. Henry Nwauba (Imo State) adopted a resolution that was of urgent public interest.

The Federal lawmaker to the House that a viral social media trend had brought the sale of Polaris Bank for N40 billion to the attention of the general public.

Nwauba also stated it is important to ensure that the affected bank’s divestiture did not endanger the primary justification for the CBN‘s intervention in the bank.

According to him, the  Bankers’ Bank intervention in the process is to serve the interests of the Nigerian public.

The divestment process, he said, should be conducted in the most open manner possible.

Hon. Nwauba further noted this is required to prevent public outcry and an unfavourable response from important economic stakeholders, including international business partners, the banking sector, depositors, and correspondent banks.

The legislator also argued that the creation of Polaris Bank resulted from the rescue of the now-defunct Skye Bank Plc, which he stated collapsed as a result of bad corporate governance and non-performing loans at the time.

This was the reason over a trillion Naira in public money was devoted to saving the bank, Nwauba claimed.

The Reps member further observed that the proposed transaction is cloaked in secrecy,  and it is unclear, as it has to be carried out with accountability and transparency to dispel rumours of corruption.

The now-defunct Skye Bank was a bank of systemic importance with a sizable population of staff, clients, and other stakeholders, he noted.

Without a rescue, the bank, according to him, would have had a negative ripple impact on the economy and reputation worldwide.

Therefore, the House established an Ad hoc Committee to assess the overall expenditure made by the Federal Government of Nigeria in Polaris Bank and account for every Federal Government financial input into the bank within 20 days.

The House as well argued that this should be done through the CBN, NDIC, and AMCON in order to ascertain whether the conditions and terms of the sale were likely to guarantee a profitable return on the public monies already invested in the bank, whether as bailout money or other types of investments.

The committee was encouraged by the House to take the required steps to guarantee that the public money given to Polaris Bank was properly documented and accounted for, report said.

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