CBN, NDIC begin probe of nationalised banks

There are strong indications that the banking sector regulators, the  Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC), may have commenced a probe into the activities of the interim managements that were appointed for the eight rescued banks by the CBN aftermath of the stress test in 2009.

The regulators have begun with the three banks, which were nationalised recently. The banks  are Mainstreet Bank, Keystone Bank and Enterprise Bank. NDIC officials were deployed in the affected banks shortly after the takeover, by the Asset Management Corporation of Nigeria (AMCON).

A source at the NDIC confirmed the deployment, said it was a routine exercise, stressing that the corporation resolved recently to step up its bank examination role to forestall any misdemeanour in any of the banks. Apart from probing into the activities of the former managers, the bank examiners are also taking stock to verify the actual status of the banks and to forestall possible sharp practices by the new managements.

An official of the Keystone Bank Limited said that NDIC officials had been frequenting the bank for some time now, stating that it was difficult to ascertain their mission other than their routine checks.

It will be recalled that AMCON recently acquired from the NDIC the three bridge banks to assume the assets of former Afribank, Bank PHB and Spring Bank. Consequently, AMCON injected N679 billion into the bridge banks to meet the minimum capital base of N25 billion and the minimum capital adequacy ratio of 15 per cent.

MainStreet Bank, which assumed the assets of Afribank, received N285 billion, Keystone Bank, which assumed the assets of Bank PHB, got N283 billion and Enterprise Bank, which assumed the assets of Spring Bank, also received N111 billion.