CBN, NDIC Okay N13 Billion for Failed Banks’ Depositors


Hope for the payment of more than N13.8 billion owed depositors of three allegedly failed banks was rekindled yesterday when the bank owners and bank regulators gave the go ahead for settlement irrespective of pending legal cases challenging the liquidation of the three banks.

Representatives of Fortune International Bank, Peak Merchant Bank and Triumph Bank at a meeting with the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) facilitated by the Senate Committee on Banking nevertheless accused CBN of bad faith in the revocation of the their licences.

While agreeing to the payment of the deposits, the three banks separately picked holes with the excuses given by CBN for the revocation of their licences.

The regulators were represented by Mr. Tunde Lemo, Deputy Governor, CBN, and Alhaji Ganiyu Ogunleye, Managing Director, NDIC, at the meeting presided over by Senator Nkechi Nwogu, Chairman, Senate Committee on Banking, Insurance and other Financial Institutions.

The banks were represented by Senator Azuta Mbata, Vice-Chairman, Fortune International Bank; Chief Olawale Emmanuel represented Peak Merchant Bank while Mr. Lanre Osinaike, Triumph Bank’s solicitor represented the bank.

Members of the Senate Committee present at the meeting included Senators James Manager (PDP, Delta South), Patricia Akwashiki (ANPP, Plateau), Felix Bajomo (PDP, Ogun) and Ayo Arise (PDP, Ekiti).

Fortune and Triumph lost their licences at the end of the consolidation of the bankinh industry in January 2006 while Peak Merchant Bank lost its in 2003.

On the occasion, Mbata said: “We are willing to do anything possible within the ambits of the law to support the aspect relating to payment of depositors’ money. I am happy that it is not in contest that the bank is liquid enough to pay the money.

“We are calling upon CBN to please, pay depositors their money, people should be paid their money, we do not have any difficulty with that,” Mbata said even as he asserted that the bank had outstanding issues pertaining to the revocation of its licence which it was determined to settle in the courts.

Asserting the bank’s credible financial rating prior to the withdrawal of its licence, he said: “It is on record that Fortune Bank was the most highly capitalised bank in this country at one point. At the time we invested in the bank, we put N3 billion in the bank in cash and at that time most of the big banks were capitalised at about N600 million.”

“We too are suffering the loss of money which we invested from the perspective of investment. We think that the pain is more on our depositors,” Mbata, a former member of the committee during his eight years stint in the Senate, said yesterday.

Officials of the two other banks spoke in the same light.

Responding to the position of the bank owners, Mr. Lemo said yesterday:

“The first course is to ask the plaintiffs to withdraw their case from court. If they do that of course the governor’s promise to pay the depositors their money would be met immediately.”

“The second way to do this is to perhaps seek the leave of the court. That means if we come together and discuss the issue, then go back to court and seek leave of court to pay. If that is not resolved and there is no way we can run away from that because the payment is tied to the revocation of license,” added.

Fortune’s deposit liability as at October 2008 reportedly stood at N10.2 billion while that of Triumph Bank stood at N3.65 billion. The deposit liability of Peak Merchant Bank was not given yesterday.