Senate seeks sanction for chief executives of failed banks

Soji-Eze Fagbemi and Taiwo Adisa, Abuja - 25.01.2008

The Senate on Thursday directed the Central Bank of Nigeria (CBN) and the Nigerian Deposit Insurance Corporation (NDIC) to sanction the chief executive and management staff of failed banks, as the upper chamber was informed that N10 billion depositor’s funds are still trapped in four distressed banks.

Presenting her committee’s interim report on the agonies of the depositors of failed banks, the Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Nkechi Nwaogu, disclosed that out of N72 billion of depositors funds, N10 billion was still trapped in four distressed banks while N62 billion of such funds had been resolved.

According to the report, four banks whose cases are still pending before the courts are Fortune International Bank, Liberty Bank, Triumph Bank and Societe Generale Bank.

Senator Nwaogu stated that with regard to the 14 banks, guaranteed private deposits amounted to N106 billion, while the seven banks whose purchase and assumption have been concluded accounted for N62 billion or 58 per cent of the private deposits of the 14 banks.

“After due consideration of the facts of the motion and the responses presented by the Central Bank of Nigeria (CBN) and the Nigerian Deposit Insurance Corporation, the committee is of the view that a lot has been put in place by the CBN and NDIC through the purchase and assumption mechanism in protecting private depositors’ funds trapped in the failed banks in spite of numerous litigations fraughting the entire process.”

Giving the recommendations of the committee, Senator Nwaogwu said the Senate should commend the wisdom of the CBN and NDIC in virtually resolving all the problems associated with the depositors funds trapped in the failed banks.

However the committee said: “the Central Bank of Nigeria and the Nigeria Deposit Insurance Corporation should discipline any director or management staff found to have contributed towards the failure of these banks.”