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Keystone Bank faces customer exodus amid speculation of financial instability

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By Temi Olowu

Keystone Bank, one of the commercial lenders in Nigeria, is currently experiencing significant withdrawals from customers amid growing concerns about the bank’s financial health.

Sources indicate that several high-value depositors and customers are gradually transferring their deposits to other institutions to mitigate potential losses should the bank encounter regulatory issues.

Last month, the Central Bank of Nigeria (CBN) revoked Heritage Bank’s license due to financial instability and regulatory breaches, triggering widespread apprehension within the banking sector.

However, there is no concrete evidence suggesting Keystone Bank is under similar financial stress or facing imminent sanctions from the CBN.

In response to heightened speculation and substantial withdrawals, Keystone Bank temporarily shut down its mobile app last night to prevent a run on its deposits.

Despite these actions, the CBN has reassured the public of the banking system’s stability and the safety of their deposits.

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The Director of the CBN’s Corporate Communications Department, Hakama Sidi Ali dismissed rumors about the potential revocation of operating licenses for Keystone, Fidelity, Polaris, Wema, and Unity Banks.

Ali clarified that a circular issued on January 10, 2024, regarding the dissolution of the boards of Union, Keystone, and Polaris Banks, was mistakenly perceived as a recent directive.

“The central bank, with its robust regulatory framework, is proactively ensuring the stability of Nigeria’s financial system and guaranteeing the safety of depositors’ funds in all banking institutions,” Ali stated.

In light of the recent revocation of Heritage Bank’s license, various companies, including a notable downstream operator, are restructuring their finances.

The operator reported difficulties transacting on Keystone Bank’s platform and discovered that the bank is under pressure from customers moving their deposits.

Keystone Bank could to be reached for a reaction on the current happening in the bank.

Also, a search on the bank’s website revealed nothing about its financial position, a situation attributed to the fact that the bank was not quoted on the Nigerian Exchange

As the situation unfolds, Keystone Bank’s actions and the CBN’s reassurances aim to stabilize the banking environment and maintain public confidence in Nigeria’s financial system.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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