BY KAYODE OGUNWALE
Finance Minister, Mrs. Zainab Ahmed, on Friday directed the Central Bank of Nigeria (CBN), and the Nigeria Deposit Insurance Corporation (NDIC), to investigate and prosecute Directors and Executive Management of defunct Skye Bank culpable for its eventual collapse.
The operating license of Skye Bank Plc was last month revoked by the CBN and Polaris Bank Limited set up as a bridge institution, with the Asset Management Corporation of Nigeria (AMCON) recapitalising it to the tune of N786 billion.
The minister, spoke during her familiarization visit to the NDIC headquarters in Abuja, also ordered the investigation of other deposit money banks in liquidation, expressing serious concern over the spate of non-performing loans in the banking industry.
She added that although the bail-out 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 intuitions who abused the trust placed on them by depositors.
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, to serve as a deterrent to other operators in the financial system as the federal government is no longer prepared to treat such serious infractions with levity.
The Minister urged the CBN and NDIC to ensure that their monitoring role in the banking industry is continuous, because according to her, “if you capture these issues early, there is a better chance of us protecting these banks, protecting shareholders and depositors.”
“The example of the recently wound-up Skye bank, now Polaris Bank is something we would look into. We would find out what happened. Your investigation must be thorough, we are going to hold whoever is responsible for the failure of that bank,”
Welcoming Hajia Ahmed earlier, NDIC’s Managing Director/Chief Executive, Alhaji Umaru Ibrahim, assured 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.
He also expressed the corporation’s determination 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, he assured the Minister, is to ensure the safety of depositors’ funds and minimise the disruption of banking services.
He further 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, while N69.6 million was also paid to insured depositors of Primary Mortgage Banks (PMBs). A total number of 46 DMBs he stressed are currently in liquidation.
The MD/CE thereafter assured the Minister that the corporation used the most appropriate failure resolution option in the case of the defunct Skye Bank, thereby saving over 6,000 jobs, just as the depositors can continue to operate their accounts with the new Polaris Bank Limited which assumed its entire assets and liabilities.
Earlier, according to a statement by Mohammed Kudu Ibrahim, head, communication and public affairs of the corporation, quoted the MD/CE as informing the Minister that the total amount so far paid by the corporation under the Fiscal Responsibility Act amounted to N175 billion.
Responding, the Minister commended the NDIC for the thoroughness of its bank examination reports which have become acknowledged in the banking system, while also expressing appreciation to the corporation for the prompt payment of its contribution under the Fiscal Responsibility Act, adding that the Federal Government regarded the NDIC as a critical player towards the actualization of its Economic Recovery Growth Plan (ERGP).
Meanwhile, the Minister who also visited the Nigeria Customs Service on familiarisation visit noted that its capacity to generate much more revenue than it is currently doing, noted the poor salary structure compared to those of other revenue generating agencies.
As chairman of the board of the NCS, the Minister promised to “find ways of increasing their salaries for greater efficiency.”