SAVANNAH BANK MAY REOPEN SOON 17 YEARS AFTER

Seventeen years after Savannah Bank was shut down, the House of Representatives yesterday resolved to investigate the Central Bank of Nigeria, CBN, for withdrawing the operating license of the commercial bank.

Also to be investigated is the Nigerian Deposit Insurance Corporation, NDIC which took over as liquidator of the bank, leading to the sealing off of the branches of the bank all over the country.

Members of the House reached the decision on the heels of a motion captioned “Need to Investigate the Central Bank of Nigeria and the Nigerian Deposit Insurance Corporation on the Current Status of Savannah Bank”, moved by Hon. Magaji Da’u Aliyu.

It will be recalled that the operating licence of Savannah Bank Plc was withdrawn by the CBN on 15 February 2002 on the ground that the bank did not have enough assets to meet its liabilities, did not also comply with apex bank obligations as well as another reason that the promoters of the bank had been unable to prevent further deterioration of the bank. But the bank later challenged its closure in court and in a ruling on 20 October 2006, High Court of the Federal Capital Territory, Abuja held that the CBN had acted properly in revoking the bank’s licence but on appeal. Subsequently, the Court of Appeal in a ruling on 6 of February 2009 ordered the re-opening of the bank and also ordered the CBN and the NDIC to pay N100 million to the bank as damages.

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Leading the debate, the lawmaker said, “The House is aware 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.

“Further aware that seventeen years after Savannah Bank’s licence was restored, the bank is yet to commence operations; “Again aware that at the time of its forceful closure, the bank had nearly 85,000 shareholders, share capital of N1 billion and about 118 branches with depositors funds who were in hundreds of millions; “Concerned 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”. 

Adopting the motion, the House mandated its 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 Committee will also ascertain whether CBN has put effective measures put in place to avoid the reoccurrence of what led to the withdrawal of the licence of the bank and its eventual closure in 2002.

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