Economist decries revocation of Heritage Bank by CBN

An Economist, Mr Abba Adaudu, has decried the revocation of the licence of Heritage Bank by the Central of Nigeria (CBN) due to a breach of banking regulations.Adaudu, who is also a financial consultant, spoke with the News Agency of Nigeria (NAN) on Tuesday in Abuja.He said that the revocation of the bank's licence would have adverse effects as all its customers would flood the bank's offices nationwide to collect their deposits.According to him, the revocation of the licence of the bank has multiplier effects on the economy as many staff of the bank will lose their jobs and will again be thrown to the labour market.Adaudu said that the revocation would have a lot of negative effects on the banking system as many people might be afraid to put their money in the bank.NAN reports that the CBN on Monday revoked the banking licence of unlisted lender Heritage Bank Plc due to a breach of banking regulations.According to CBN, the bank has continued to suffer and has no reasonable prospects of recovery; thereby making the revocation of the licence the next necessary step.The central bank said its action followed a period of engagement with the bank where it prescribed various supervisory steps intended to stem a decline in Heritage's performance.Adaudu, however, argued that as the nation was facing economic crisis presently, the revocation would trigger more hardship on the people as the economy, dependents and staff of the bank would suffer.He advised that CBN would not have revoked the bank but dissolve its board as it did to the Keystone, Union and Polaris banks and takeover the financial institution for proper management.He listed letters of credit, promissory notes, provision of admirable customer's service, providing adequate information and providing account statement as some of the services the customers would lose.'Other services customers will lose are protecting customer deposits, honouring cheques, provision of access to financial services and protecting customer confidentiality,'' he s aid.On the Minimum wage crisis between Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC), Adaudu said that Nigerian workers' salaries were very meagre coupled with the hyperinflation facing the country currently.He urged the Federal Government to constitute cooperative farming for successful businessmen in the six Geo-political Zones to curtail the current high prices of foods in the country.According to Adaudu, no amount of money paid to the civil servants will be enough by the Federal / state governments if high rate of inflation is not lessened.He said forming cooperative farming would assist to cushion the effects of food shortage and high prices of food in the country.The economist added that empowering successful businessmen in the six geo-political zones would help to address the current food crisis in the country.Adaudu explained that if this policy was implemented with adequate supervision and security to protect the farmers in these zones, more food and employment opportu nities would be created.Source: News Agency of Nigeria