Nigeria’s finance minister wants people responsible for bank’s failure prosecuted

Nigeria’s recently appointed Minister of Finance Zainab Ahmed is not happy about the failure of Skye Bank, a Nigerian lender whose licence was revoked by the central bank last month. She has, therefore, directed the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to investigate and prosecute all the officials of the bank whose action or inaction contributed to the collapse of the bank. She also wants a similar action taken as regards other Deposit Money Banks in liquidation.

“We have to show some examples. We cannot just be bailing out banks and leaving perpetrators of the failure of these banks to go scot-free,” Ahmed said, Friday while on a visit to the NDIC in Abuja.

“Even though you, NDIC, intervene by protecting depositors, but your intervention is limited.

“You’re not able to pay back all that the depositors have. We must show some examples and this is a good one for us to start with,” the Minister said.

The central bank had last month revoked the licence of Skye Bank which failed to stabilize after several attempts of the CBN to save it. Hence, the regulator created Polaris Bank to operate the failed bank until a buyer can be found for its operations. Thus, N786 billion has been injected into the new bank as the Asset Management Corporation of Nigeria (AMCON) commences the sale process.

The central bank had in 2016 sacked the Board and management of the bank due to lapses in corporate governance as well as its “persistent failure […] to meet minimum thresholds in critical prudential and adequacy ratios, which culminated in the bank’s permanent presence at the CBN Lending Window”.

Ahmed  stressed the need for the NDIC — an independent government agency created to protect depositors and guarantee payment of insured funds in the event of failure of insured institutions — to continuously monitor banks in the country to ensure issues are detected early and addressed before they end up as crisis.