The Central Bank of Nigeria (CBN) has defended its decision to provide what it describes as “financial accommodation” to support the proposed merger between Unity Bank Plc and Providus Bank Limited.

Reacting to accusations in some quarters that political pressure may have led it into giving financial support to Unity Bank compared to its revocation of the operating licence of Heritage Bank in June, a top official of the apex bank, who spoke on condition of anonymity, told New Telegraph that the two situations were not comparable.

The official, who said Heritage Bank was in a much bigger hole, stressed that if the apex bank had not moved quickly to revoke the former’s operating license at the time it did, the bank’s contagion could have spread to the entire banking industry, thereby negatively affecting the economy.

The official stated: “Heritage Bank’s problem had been allowed to fester such that at the time its license was revoked, it had N1.3 trillion in clearing that was unpaid. No bank was willing to acquire or merge with it.

“It was a well -known fact in the industry that the bank’s license should have been revoked long before the current CBN management came on board.

“Clearly, you can’t compare the Heritage Bank situation to Unity Bank‘s. The CBN has no interest in seeing banks collapse; it is not good for the financial system and the economy.

So, if there are financial institutions that express interest in merging with or acquiring a struggling bank, we will definitely look at how we can support the process. “That is what happened with regard to the proposed merger between Providus Bank and Unity Bank.”