In order to bolster the stability of Nigeria’s financial system and avert potential systemic risks, the Central Bank of Nigeria (CBN) has granted approval for a pivotal financial accommodation to support the proposed merger between Unity Bank Plc and Providus Bank Limited.
This information is contained in a press release signed by its acting Director of Corporate Communications Mrs Hakama Sidi Ali which was circulated to the media on Tuesday.
The merger is contingent upon the financial support from the CBN. The fund will be instrumental in addressing Unity Bank’s total obligations to the Central Bank and other stakeholders.
The bank’s power to take this very crucial decision is derived from the provisions of Section 42 (2) of the CBN Act, 2007 and is ancored on its belief that this arrangement is crucial for the financial health and operational stability of the post-merger organisation.
Apparently justifying its different course of action compared to the one it took in the case of Heritage Bank, the Central Bank stressed that “no Nigerian bank currently faces a precarious situation comparable to that of Heritage Bank, which was recently liquidated.”
“The CBN remains committed to safeguarding depositors’ interests and ensuring the smooth functioning of the banking sector through proactive measures and strategic interventions.
The apex bank further explained that this decision underscores its dedication to maintaining financial stability and promoting confidence in the banking system during this transformative period.