Failed banks: Hope rises for depositors, - As Senate committee tasks EFCC on recovery of N53.3bn

Culled from the Nigerian Tribune of 13th July 2009

INDICATIONS that Nigerians whose funds are trapped in the failed banks may recover their money soon emerged last week, as the Senate has drafted the Economic and Financial Crimes Commission (EFCC) into the issue.

The chairman of the Senate Committee on Banking, Currency, Insurance and other Financial Institutions, Senator Nkechi Nwaogu, had, during a senate session last week, stunned the nation by releasing the list of high-profile debtors, whose unguaranteed loans brought down the banks.

Senator Nwaogu had disclosed that the high-profile debtors owed the banks N53.3 billion while at another forum, had declared that the total amount trapped in the failed banks was N188 billion.

However, to ensure that the army of unfortunate Nigerians, whose moneys are trapped recover their hard-earned lifesavings, the Senate Committee on Drugs, Narcotics, Anti-Corruption and Financial Crimes, headed by Senator Sola Akinyede, has asked the EFCC to take urgent steps to ensure the recovery of the N53.3 billion insider related loans trapped in the banks that failed to meet the 2005 consolidation exercise.

Senator Akinyede, in a letter dated July 7, 2009 and addressed to the chairman of EFCC, Mrs. Farida Waziri, said that the organisation must brief the Senate within seven days on its efforts at recovering the trapped funds.

Chairman, Senate Committee on Banking, Senator Nwaogu, had presented a report on the plight of Nigerian depositors of failed banks to the Senate last week, and also presented a list of the debtors to the banks, especially the directors who were responsible for the collapse of the banks through insider loans.

Senator Akinyede in the letter to the EFCC said that the organisation must take advantage of Nigeria’s relevant laws to ensure the recovery of the trapped funds.

The letter with the title “INSIDER CREDIT ABUSES BY DIRECTORS OF FAILED BANKS,” read in part:

“At the sitting of the Senate on Tuesday, 7th July, 2009, the issue of insider credit abuses by directors of failed banks was discussed and the names of erring directors were disclosed. The Senate was shocked by the degree of the abuses and the staggering amounts involved.

“Having regard to the Powers of the EFCC under the Economic and Financial Crimes (Establishment) Act, 2004 particularly section 7 (2) (c) (d) and (f) which provides that:

“In addition to the powers conferred on the Commission by this Act, the commission shall be the coordinating agency for the enforcement of the provisions of:

“(c) the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, as amended;

“(d) the Banks and other Financial Institutions Act 1991, as amended;
“(f) any other law or regulation relating to economic and financial crimes including the criminal code and penal code.”

“The committee will like to be furnished with a report on what the commission has done so far with a view to ensuring the recovery of outstanding sums and/or prosecution of those who have been found culpable.

Please, furnish the committee with the report within seven (7) days of the receipt of this letter.”

When the Senate came out with the list of the failed banks fund last week, the EFCC boss immediately referred the report to the commission’s Bank Fraud (BF) unit and directed them to move in and get the necessary information on the matter.