CBN Responds to Court Ruling on Union Bank Board Dissolution

The Central Bank of Nigeria (CBN) has acknowledged a recent Federal High Court judgment that overturned its earlier decision to dissolve the board and management of Union Bank of Nigeria (UBN).

In a statement issued on Thursday by its Acting Director of Corporate Communications, Hakama Sidi-Ali, the apex bank said it is currently reviewing the judgment and has initiated steps to obtain the Certified True Copy for detailed examination.

The court ruling, delivered on Wednesday at the Lagos Division, found that the CBN exceeded its legal authority when it dissolved the bank’s leadership in January 2024. As a result, the court nullified the regulatory action, effectively reversing the decision.

Reacting to the development, the CBN reaffirmed its commitment to operating within the bounds of the law, noting that all its actions are guided by its statutory mandate and established procedures.

Court Verdict Challenges Regulatory Authority

The case centres on the CBN’s intervention in Union Bank in early 2024, when it removed the bank’s board and management as part of a regulatory move. While the central bank did not immediately provide detailed reasoning behind that action at the time, the decision formed part of its broader oversight responsibilities within the financial sector.

However, the Federal High Court ruled that the apex bank overstepped its powers, raising important questions about the limits of regulatory authority in Nigeria’s banking system. The judgment highlights the delicate balance between regulatory intervention and adherence to legal frameworks governing such actions.

Although the full implications of the ruling are yet to unfold, it signals that even key financial regulators must operate strictly within the law when taking decisive actions affecting corporate governance in financial institutions.

CBN Reassures Customers and Financial Markets

Despite the legal setback, the CBN sought to calm concerns about the stability of Union Bank and the broader financial system. The bank emphasised that Union Bank remains operational and fully capable of meeting its obligations to customers, depositors, and other stakeholders.

It also reiterated its commitment to maintaining strong regulatory oversight to ensure that the institution continues to operate safely and sustainably. According to the statement, preserving public confidence in the financial system remains a top priority.

The apex bank added that it would carefully review the court’s decision before determining its next steps, signalling that further action, legal or administrative, could follow after a thorough assessment.

The development underscores the ongoing tension between regulatory authority and judicial oversight, particularly in a sector as critical as banking, where decisions can have far-reaching economic consequences.

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