Skye Bank, Nigeria

The Minister of Finance Hajiya Zainab Ahmed yesterday directed the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to fully investigate and prosecute all the directors and executive management who contributed to the collapse of the defunct Skye Bank Plc.

The probe will be extended to other Deposit Money Banks (DMBs) in liquidation. The minister gave the directive during her familiarization visit to the executive management of the NDIC led by the Managing Director and Chief Executive Umaru Ibrahim.

Also in the team that welcomed the minister was the Executive Director (Corporate Services) of the corporation, Hon. Omolola Abiola-Edewor.

A statement by the Head, Communication and Public Affairs of NDIC, Mohammed Kudu Ibrahim, said the minister expressed concerns about the spate of non-performing loans in the banking industry.

She said; “While  the bailout of distressed financial institutions was necessary in the interest of the stability of the banking system, emphasis should also be placed on the investigation and prosecution of delinquent board directors and executive management of financial institutions  who abused the trust reposed in them by depositors.

The statement said: “The minister urged the CBN and the NDIC to use the recent failure of the defunct Skye Bank Plc as an opportunity to deal decisively with any of its directors and management found culpable in the course of the investigations, so as to serve as a deterrent to other operators in the financial system.

“The Federal Government is no longer prepared to treat such serious infractions with levity.

Earlier in his welcome address, the NDIC MD/CE, Umaru Ibrahim, assured the minister that the corporation will “do all it can to assist in the recovery of all the debts owed the defunct Skye Bank and other banks in liquidation.

“The NDIC is determined to ensure that the directors who perpetrated in insider abuse and other illegalities in running the affairs of the bank are investigated and prosecuted by appropriate authorities.

“The primary concern of the NDIC is to ensure the safety of depositors’ funds and minimise the disruption of banking services.

The MD/CE informed the minister that since 1991, the aggregate payment to depositors, creditors and shareholders of 46 closed banks amounted to N11.75 billion, out of which the total payments to insured depositors of Deposit Money Banks (DMBs) amounted to N8.252 billion.

The MD/CE also stated that a total of N2.89 billion was paid out to insured depositors of Microfinance Banks (MFBs) covering 81,657 individual accounts.

He said bout N69.60 million was also paid to insured depositors of Primary Mortgage Banks (PMBs). A total number of 46 DMBs, he further stated, are currently in liquidation.

He disclosed that the total amount paid by the corporation under the Fiscal Responsibility Act amounted to N175 billion.

The MD/CE  told the minister that the NDIC “ used the most appropriate failure resolution option in the case of the defunct Skye Bank to ensure that over 6,000 jobs were saved while its depositors continued to operate their accounts with the new Polaris Bank Limited which assumed its entire assets and liabilities.

Responding, the minister commended the NDIC for the thoroughness of its bank examination reports which have become acknowledged in the banking system.

She also expressed her appreciation to the corporation for the prompt payment of its contribution under the Fiscal Responsibility Act.

 

You may also like

Read Next