House Probes Current Status of Savannah Bank

The House of Representatives has decided to investigate the Central Bank of Nigeria (CBN) and Nigerian Deposit Insurance Corporation (NDIC) on the current status of Savannah Bank in order to ascertain whether the bank has fulfilled all the requirements to commence business.

The House took the decision at the plenary on Thursday following the adoption of a motion brought by Hon. Magaji Aliyu for the need to investigate CBN and NDIC on the current status of the bank.

While moving the motion, he recalled that the operating licence of Savannah Bank was withdrawn by the CBN on February 15, 2002, on the ground that the bank did not have enough assets to meet its liabilities, and that it did not comply with CBN obligations, and that the promoters had been unable to prevent further deterioration of the bank.

Aliyu also recalled that NDIC took over as the liquidator of the bank which led to the sealing off of the branches of the bank all over the country.

 

The lawmaker also recalled  that the bank challenged the closure in court, and in a ruling on October 20, 2006, by  the Federal Capital Territory High Court, it was held that the CBN acted properly in revoking the bank's licence, but on appeal, the Court of Appeal in a ruling on February 6, 2009, ordered the re-opening of the bank and also ordered the CBN and NDIC to pay N100 million to the bank as damages.

Aliyu stressed that history was made in the Nigerian banking industry when in line with the order of the court, the licence was restored, thus putting an end to seven years of agony for directors, depositors and other stakeholders of the bank.

He however lamented that 17 years after Savannah Bank's licence was restored, the bank is yet to commence operations.

Aliyu stressed that at the time of its forceful closure, the bank had nearly 85,000 shareholders, a share capital of N1 billion, and about 118 branches with depositors funds who were in hundreds of millions.

The lawmaker expressed concern that most of the depositors whose funds were trapped in the bank for the last 17 years are either dead, bankrupt or in dire hardships after many years of depression and discontentment.

To this end, the House mandated the Committee on Banking and Currency to interface with "the CBN and NDIC on the current status of the bank and also ascertain whether it has fulfilled all the requirements to commence business."

The green chamber also mandated the shareholders and the new management of the bank on possible ways to refund depositors.

It also directed the CBN to put effective measures in place to avoid the reoccurrence of what led to the withdrawal of the licence of the bank and its eventual closure in 2002,  and report back within two months for further legislative action.