Panic withdrawal: CBN debunks distress alert on Zenith bank

Ahead of the Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN) starting on Monday July 26, the financial regulator has reiterated the resilience, safety and soundness of Nigerian Deposit Money Banks (DMBs) and other financial institutions under its supervision.

The apex bank made the clarification following unconfirmed reports in the social media that depositors fund in Zenith Bank may be trapped as the bank is no more solvent.

Speaking with journalists at the weekend, the Acting Director, Corporate Communications Department of the Bank, Osita Nwanisobi, said the Nigerian banking system had proven to be very sturdy in spite of the global challenges posed by the corona virus pandemic (COVID-19).

The online report claimed that Zenith has been facing the worst liquidity challenge since March of 2021 due to gross mismanagement of her fund which has led to panic withdrawals by depositors in Lagos, Kano and other parts of the country.

According to Nwanisobi, routine bank examination and stress test for financial institutions operating in the country indicated that no Deposit Money Bank (DMB) licensed by the Central Bank of Nigeria is currently under any form of financial distress, adding that the banks have adequate capital to absorb unexpected losses that may arise.

In line with the Bank’s resolve to ensure adherence to prudential standards, Nwanisobi said the CBN continues to monitor the activities of banks in order to ensure that no individual or institution breaches the laid down guidelines. He therefore advised the banking public to disregard any report alleging insolvency in the Nigerian banking sector.