The House of Representatives has mandated its Committee on Banking and Currency to summon the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele and Managing Director, Nigerian Deposit Insurance Corporation (NDIC), Umaru Ibrahim, to ascertain the new status of Savannah Bank with regard to its readiness to commence operation and whether they have fulfilled all requirements to begin business.
The Committee is also expected to invite the shareholders and the new management of the bank to brief it on possible ways they have fashioned out to pay or refund depositors funds.
The committee, which is to submit its findings in two months, has also been mandated to ensure that effective measures are put in place to avoid the reoccurrence of what led to the withdrawal of the bank’s licence and eventual closure in 2002.
The resolution was reached at Thursday plenary sequel to the adoption of a motion of urgent public importance on an urgent need to investigate Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) on the current status of Savannah Bank, sponsored by Aliyu Da’u Magaji (APC, Jigawa).
Leading debate on the motion, Magaji noted that the licence of Savannah Bank Plc was withdrawn by the Central Bank of Nigeria (CBN) on 15 February 2002 (17 years ago) on the ground that the bank did not have enough assets to meet liabilities, did not comply with CBN’s obligations and that the promoters had been unable to prevent further deterioration.
He said consequently, the NDIC took over as liquidator leading to the sealing off of the bank’s branches all over the country.
The lawmaker said he was aware that the bank challenged the closure in court and in a ruling on 20 October 2006, the Abuja High Court said the CBN had acted properly in revoking the bank’s licence but a Court of Appeal in a different ruling on the 6th of February 2009 ordered the re-opening of the bank and ordered the CBN and the NDIC to pay N100 million to the bank as damages.
Magaji observed that history was made in the Nigerian banking industry when in line with the order of the court, the licence was restored, putting an end to seven years of agony for directors, depositors and other stakeholders of the bank.
According to him, “seventeen years after Savannah Bank’s licence was revoked and restored, the management of the bank is yet to commence operation”.
He expressed worry 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 in hundreds of millions.
Magaji, who represents Birnin-Kudu/Buju said he was concerned that most of the depositors whose funds were trapped in the bank for 17 years were either dead or bankrupt, and that the majority that are alive are in dire hardship after many years of depression and discontentment.
