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Can CBN recover Polaris Bank’s N786bn taxpayers’ money bailout this year?

Fresh signal has emerged from the Central Bank of Nigeria (CBN) suggesting that chances are that the N786bn ($2.2bn) bailout fund given to former Skye Bank, now Polaris Bank may go the way of the controversial $7bn it ‘dashed’ to 14 banks in 2006.

Recall that the apex bank had remained silent on every call by Nigerians including defunct SPIP to move for the recovery of the fund.

CBN had further remained mute on recovering the huge fund upon the startling revelations made by its former Deputy Governor, Dr Obadiah Mailafia, who in his report, made it clear that even though he was not privy to the plot to rob Nigerians, CBN owe it a duty to explain to Nigerians how its original plan of allowing 14 banks to become part managers of Nigeria’s reserves converted the said fund to bailout which it surreptitiously wrote off as a ‘dash’ in a document yet to be made public.

The growing fear or suggestion that CBN may not work with AMCON to recover the said humongous bailout which in 2018 was given to the new management of the annexed financial institution to reposition it in two years, came from silence so far maintained on the recovery of the $7bn given out to 14 banks in 2006.

Besides, the apex bank earlier in the week, gave the bank award of Best Bank in Consumer Protection even though it in itself, handpicked the managers of Polaris Bank upon takeover.

Analysts say by the award, CBN has considered itself a judge in its own case so far Polaris Bank is still under its surveillance.

Earlier in the week, Polaris Bank issued a statement that it has emerged the Best Deposit Money Bank (DMB) in Consumer protection in a contest staged by the apex bank.

The Award was presented to the bank at the Jos Bankers forum— an Annual Dinner and Award event organised by the Central Bank of Nigeria (CBN), Jos branch, held to recognise and reward DMBs for their performance 2019.

Speaking on the award, the Managing Director/CEO of Polaris Bank, Mr. Tokunbo Abiru, thanked the organisers for their due diligence in selecting Polaris Bank among other awardees and “recognizing its stellar performance in promptly resolving customer complaints.”

Business Hilights Intelligence Unit (BHIU) recalls that the apex bank had in 2018, revoked the licence of Skye Bank for failing to meet capital and liquidity requirements, and asked AMCON to capitalise Polaris Bank with N786bn ($2.2bn).

Chief Executive officer of AMCON, Ahmed Kuru has explained in 2018 that the authorities intervened in the Skye Bank matter because of a lot of systemic issues, including saving more than 5,000 jobs and almost N1tn in deposits.

He stated, “It is a very big bank and if you allow anything to happen to it, it will affect some other financial institutions. AMCON has no plans to establish another rescue package for the country’s banks.

According to him, “The agency will advertise for financial advisers for the sale of Polaris Bank after an investigation into the cause of its capital and liquidity challenges. We will prosecute individuals suspected to have contributed to the bank’s collapse with a view to recovering any bad loans linked to them.”

On the legality of rescuing the bank, the CBN Governor, Godwin Emefiele in 2018 also explained the legal reason behind the bank’s name change after investing close to N800 billion public fund in the bank.

He averred that “Having gotten to a point where the Central Bank of Nigeria and the Federal Government has invested close to N800 billion in this bank, at some point, it had to be seen to be owned by the CBN until we find investors that will be willing to pay a fair price for the business. That is the compelling reason the name had to change.”