Leo Aligwo
24 December 2011
As shareholders and management of Savannah Bank Plc and Societal De General Bank of Nigeria (SGBN) await the final report of the committee set up by the Nigeria Deposit Insurance Corporation (NJDIC) to review the circumstances that led to the revocation of their operating licenses among other issues, financial experts have given recipe on the way forward for the two moribund financial institutions.
Speaking in an interview with Saturday Champion in Lagos, the Secretary General of the Independent Shareholders Association of Nigeria (ISN), Mr. Adebayo Adeleke, noted that the two money deposit banks have been out of circulation for about 10 years running, adding that their proposed resumption of normal banking services would be a cheery news to the public.
In addition, he said the duo have equally been struggling to come back to operation but were financially incapacitated.
According to him, what the banks management wanted to do was to pay their individual depositors half of the amount in their respective accounts prior to the revocation of their operating licences while the rest would be converted to equity.
Adeleke said the management and board of the two banks should raise N10 billion to enable them resume normal banking operation and thereafter gradually build up their capital base to N25 billion.
They should in the process, also build up depositors and customers, confidence through improved services to the banking public.
He pointed out that the NDIC had earlier given them a period of six months to raise the required minimum capital base of N25 billion to enable them resume operation instantly.
He however urged the NDIC and Central Bank of Nigeria (CBN) to allow the banks operate without undue interference in their operation.
Also speaking, the Chairman, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, accused CBN and NDIC Of being responsible for problems that crippled the operations of Savannah Bank and SGBN.
Okezie argued that the issues that led to the revocation of the licence of the two commercial banks were politically motivated.
He was optimistic that the two banks would bounce back to business though it might take some time for their management to accomplish that goal.
Indeed, the endorsement of the final report of the committee on the two banks by the NDIC would pave way for the reopening of the doors of their banking hall to the banking public as well as re-absorption of their old workforce amidst recruitment of new ones.
The development, will no doubt brighten the hope of their distraught customers who have been waiting endlessly over years to recover their individual funds trapped in the two banks prior to their closure by the NDIC and Central Bank of Nigeria (CBN) for failure to beat the deadline set for recapitalization then.
Sadly enough, some of the stakeholders in financial institutions, especially the esteemed customers have died following the shocking news of suspension of their respective operation and the endless wait for reopening of their banking hall.
Again, the hard stance adopted by General Olusegun Obasanjo (rtd) in his capacity then as the President and Commander-In-Chief of the Federal Republic of Nigeria over the crisis did not help matters as stakeholders in the banking industry and other financial experts allegedly fingered political interest in the issues that led to the suspension of operations of the two top lenders .
It would be recalled that the management of NDIC had recently indicated its resolve to favour a roll out of programme for resumption of banking operation by the affected banks as soon as possible.
Briefing news men on the activities of the Corpotation mid November, 2011 in Lagos, the Managing director and Chief Executive Officer (CEO), Alhaji Umaru Ibrahim said the committee which was constituted to analyse and review issues bothering on the possible resumption of active banking operation by the two banks was expected to submit its report to the management at the end of December 2011.
He emphasized that the content of the report would determine the regulatory action that would be taken in due course.
This is even as he further assured that any decision taken would be in the best interest of the depositors and customers of the banks.
The NDIC boss disclosed that the money earlier paid by the management of Savannah bank for the purpose of recapitalization had been refunded to it by the Corporation.
In addition, he revealed that Savannah Bank had earlier submitted its blue print on how to restart the business to NDIC.
He stressed that the two banks might have justified their return to active banking operation following the efforts they made and might become fully operational within the first quarter of 2012.
In his words; “The two banks have been offered all the assistance they require to return to business so that losses incurred by depositors in the industry would be mitigated a great extent.
It was also understood that apart from issues of capital structure and allied needs, the committee would take a holistic review of the nature of their capacities in sustaining the pressure associated with banking licenses of both Savannah Bank and SGBN in 2010 through court judgment the NDC in close collaboration with the CBN made efforts to assist the affected banks to re-open their banking halls for normal operations in the interest of their aggrieved depositors and other stakeholders.
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