A Federal High Court sitting in Lagos on Monday ruled that the Central Bank of Nigeria (CBN) acted within its powers under the CBN Act & particularly Section 53 of the Banks and Other Financial Institutions Act (BOFIA), 2004 when it intervened to save depositors funds in Bank PHB.

The Court held that documentary evidence available before it showed that Bank PHB had a non-performance loan of N475 billion with its liquidity ratio below 25% and held that the bank indeed showed a sign of a failing bank which was in dire need of capital and in contravention of the provisions of the Act.

The presiding judge, Justice Charles Archibong therefore dismissed a suit filed by Bank PHB against the CBN, Keystone Bank and the Federal Government challenging the revocation of its banking licence, and takeover of its assets by the Nigerian Deposit Insurance Corporation (NDIC) and the Asset Management Corporation of Nigeria (AMCON).

He also dismissed the argument of Bank PHB that the CBN’s act of revocation was tainted with malice and held that “CBN cannot standby, once it is shown that depositors’ funds were in danger”.

The Court further held that it could not find that the CBN acted beyond its powers or did not comply with the provisions of the law on revocation of the banking licenses of Bank PHB.