Lawyer Petitions CBN to Sanction Polaris Bank for Withholding Customer's N868m Loan

Lawyer Petitions CBN to Sanction Polaris Bank for Withholding Customer's N868m Loan

Machukwu Ume, a former Imo State Attorney General, has petitioned the Central Bank of Nigeria (CBN) to sanction Polaris Bank for allegedly withholding an N868 million loan facility owed to his client, Kenchez Nigeria Limited, in what he describes as “economic murder and financial strangulation.”In a petition dated October 2, addressed to the CBN Governor and copied to the Consumer Protection and Banking Supervision Departments, Ume accused Polaris of breaching a guarantee agreement by refusing to release the funds, despite the company meeting all preconditions. He labeled the bank’s actions a “gross breach of trust” and a violation of sound banking practices.Ume explained that Kenchez secured the loan from Lecon Finance Company Limited in June 2025 to purchase a 160-ton Terex Demag AC160-2 Crane. Polaris issued a N902.7 million bank guarantee in July to back the loan, but after Lecon Finance disbursed N868 million, Polaris allegedly failed to release the funds to Kenchez, despite the company providing a legal mortgage over a property in Port Harcourt.“Despite fulfilling all requirements, Polaris has refused to honor its obligation,” Ume stated, noting that the bank’s inaction has led to N16.2 million in monthly interest accruing, costing Kenchez dearly. He further alleged that Polaris canceled five scheduled meetings to resolve the issue, showing a “clear refusal to engage in good faith.”The lawyer argued that the withheld funds have paralyzed Kenchez’s operations, threatening jobs and industrial activity. He cited a violation of Section 13 of the Banks and Other Financial Institutions Act (BOFIA) and urged the CBN to compel Polaris to release or refund the N868 million, plus accrued interest since August 4, and assume liability for ongoing monthly interest of N26,206,860.66 until resolved.Ume called on the CBN to exercise its supervisory powers to sanction Polaris, warning that the bank’s actions undermine depositor confidence and could set a dangerous precedent. “The CBN must act to protect the banking sector’s stability and prevent similar misconduct,” he said.  

Source: Lawyer Petitions CBN to Sanction Polaris Bank for Withholding Customer's N868m Loan

 - NigerianEye
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