. NIyi Jacobs
The Central Bank of Nigeria (CBN) has come under fire for its recent decision to bail out Unity Bank with a N700 billion loan, sparking concerns about regulatory equity and fair play. The move has raised questions about the apex bank’s motives and its treatment of other distressed banks.
Experts and stakeholders have expressed surprise at the CBN’s generosity towards Unity Bank, which has been struggling financially. The bank’s shareholders’ fund was negative (-N190.2 billion) as of September 30, 2023, and it sought N700 billion in financial support as well as approval for a merger with Providus Bank.
The CBN’s actions have been described as “political expediency” and “arbitrary” by some, who argue that the apex bank should have maintained a level playing field for all banks. Others have questioned the leadership, ethical, and professional standards of the CBN.
The bailout has also raised concerns about the health of the banking sector and the potential for systemic risks. Some have warned that the CBN’s actions could unleash uncertainty and mutual suspicion in the sector.
The CBN has defended its decision, stating that the financial support was necessary to strengthen the stability of Nigeria’s financial system and avoid potential systemic risks.
However, many remain skeptical about the apex bank’s motives and its treatment of other distressed banks
