Depositors, not shareholders own banks – CBN

The Central Bank of Nigeria (CBN), has come out strongly against shareholders of banks who behave recklessly as to endanger depositors’ funds entrusted in their care.

Mr. Godwin Emeilefe, CBN governor who spoke at the end of the Monetary Policy Committee, MPC, meeting on Tuesday, insisted that it has been the policy of the Bank not to allow depositors lose their money in the event of bank failure or take over.

“Since 2007, no depositor in Nigeria has lost money as a result any bank crisis or failure. It has been an official position to ensure that depositors are fully protected. This is to guard against a few shareholders playing with the life savings of Nigeria,” he said.

Emefiele noted that the apex bank has a new definition of ownership of the banks, which has enable them to protect depositors.

“We have come to believe that depositors are the real owners of banks. A five year old bank has 7-10 times depositors’ funds more than shareholders’ funds, so it is wrong to allow shareholders jeopardize the depositors’ livelihood by their reckless conduct. So our first priority is the depositor”, he declared.

He justified the hike in Monetary Policy Rate, MPR, from 16.5 to 18 percent, which will worsen borrowing and investment, and slow growth, because of the expected removal of subsidy on fuel in the second quarter of 2023. He said the main objective is to slow rate of inflation to accommodate the spike that will come with removal of subsidy before inflation begins to fall.

He said the Nigerian banking system is sound and secure despite the collapse of three banks in U.S. and Switzerland.