Finance minister says those responsible for collapse of Skye Bank will be prosecuted for their actions

FINANCE minister Zainab Ahmed has revealed that those responsible for the collapse of Skye Bank will be prosecuted and made to pay for their actions to serve as a deterrent to others who take depositors for granted.

Last week, the Central Bank of Nigeria (CBN), in consultation with the Nigerian Deposit Insurance Corporation (NDIC), took over the assets of the struggling Skye Bank and renamed it Polaris Bank. Following the takeover, fresh capital of N786bn ($2.16bn) soft and long-term financing at single digit interest rate was injected into the bank to keep the rejuvenated operations ongoing, while the initial N350bn injected into it by the CBN was withdrawn.

CBN governor Godwin Emefiele, said the strategy was for the Asset Management Company of Nigeria (Amcon) to capitalise the bridge bank and begin the process of sourcing investors to buy out Skye Bank. He added that the result of examinations and a forensic audit revealed that Skye Bank required urgent recapitalisation and can no longer continue to live on borrowed times with indefinite liquidity support from the CBN.

Speaking yesterday at the NDIC offices in Abuja, Mrs Ahmed the corporation's managing director Umaru Ibrahim, to ensure that a thorough investigation is conducted to find out why the bank failed. She said that at the end of the investigations all those found culpable in the failure of the bank would be prosecuted.

Mrs Ahmed said: “We have to show some examples. We cannot just be bailing out banks and leaving perpetrators of the failure of these banks to go scot-free.

“Even though you, NDIC, intervene by protecting depositors but your intervention is limited. You’re not able to pay back all that the depositors have, so we must show some examples and this is a good one for us to start with."

In addition, Mrs Ahmed stressed the need for the NDIC to continuously monitor the banks to ensure that problems were detected early and solved before they became a crisis. Mr Emefiele had originally said that given the good performance of the Sky Bank board and management, the CBN would retain the directors, as well as all employees under a new contract, unless anyone decides to opt out.