Seventeen years after the operating licences of some failed banks were revoked by the Central Bank of Nigeria (CBN), their depositors are yet to get their refunds. The distressed banks are Fortune International Bank, Triumph Bank and Peak Merchant Bank.

It was learnt that the inability of the depositors to get their money back was caused by litigations, largely initiated by the former owners of the rested banks.

While the Nigeria Deposit Insurance Corporation (NDIC) has paid in full the deposits of the customers of 18 liquidated Deposit Money Banks (both insured and uninsured), those of the three banks were yet to receive their refunds.

The closed banks’ shareholders are challenging the revocation of their banks’ licences, a situation that has made it impossible for the regulatory authorities to conclude the closing exercise and initiate the payment of the depositors.

Peak Merchant Bank licence was revoked on February 28, 2003, according to official documents, while Fortune International Bank Plc and Triumph Bank Plc licences were revoked on January 16, 2006.

In a paper he presented at a conference for finance correspondents at the weekend, NDIC’s assistant director, Insurance and Surveillance Department, John Kayode Abiodun, who revealed the plight of the depositors, said that the liquidation activities of NDIC as at December 2019 covered a total of 425 institutions, comprising of 51 Deposit Money Banks (DMBs), 325 Micro-finance Banks (MFBs) and 51 Primary Mortgage Banks (PMBs).

NDIC paid a cumulative sum of over N11.92 billion to depositors of distressed DMBs, MFBs and PMBs in the country since it was established.

The sum of N8.25 billion was paid to 442,999 depositors of the closed DMBs as insured amount; while over N2.97 billion was paid to 83,415 depositors of shut MFBs, and over N70.53 million was paid to 869 depositors of closed PMBs.

Noting that the litigations had held down the deposits of the banks’ customers for a period of between 14 and 17 years, Abiodun advocated for a quick resolution of the issues resulting in the revocation of the banks’ operating licences.

He said: “In view of the critical intermediary role that banks play in our economies, financial difficulties in banks need to be resolved in an orderly, quick/speedy and efficient manner, avoiding undue disruption to the bank’s activities and to the rest of the financial system.”

Abiodun stressed the need for close regulation of the banking industry to avoid banks’ failure, a recurrence, he acknowledged had spiral effects on other sectors of the national economy.

“The adoption of various bank problem resolution options had helped to enhance confidence in the nation’s banking system thereby promoting financial system stability,” he said.

Resolution is the “restructuring of a bank by a resolution authority through the use of resolution tools in order to safeguard public interests, including the continuity of the bank’s critical functions, financial stability and minimal costs to taxpayers.” (Leadership)