Insured customers of the defunct Peak Merchant Bank are to be paid their deposits, the Nigeria Deposit Insurance Corporation (NDIC) has announced.
The corporation said the verification of the details of the depositors would soon commence in line with its mandate of guaranteeing the reimbursement of depositors of their insured sums in the event of bank failure.
The Director, Communication and Public Affairs, NDIC, Bashir Nuhu, said the verification exercise would enable depositors of the defunct bank to cross-check and ascertain their account information as well as balances with the bank as at the time the bank was liquidated.
Nuhu said the process would serve as a prelude to the process to make the payment of insured sums to such depositors.
He urged the affected depositors to ensure that they visited the bank’s old premises or the Corporation’s office nearest to them with proof of account ownership and verifiable means of identification for the exercise.
The insured sum, the NDIC spokesperson explained, was the first and mandatory payment that depositors would receive, up to a specified limit, if a bank fails.
“Depositors are paid amounts in excess of the insured sums subsequently, as liquidation dividends from proceeds of the closed bank’s assets as realised by NDIC as liquidator.
Peak Merchant Bank was liquidated after the Central Bank of Nigeria (CBN) announced the revocation of its operational licence published in the Federal Government official gazetted on February 28, 2003, in line with section 12(d) of the Banks and Other Financial Institutions Act (BOFIA) 1991 as amended.
The Bank, which was licensed in February was sanctioned after observed regulatory weaknesses in terms of huge net interbank takings of N2.2 billion as at September, 2001 and a current account balance that could not absorb the cash reserve requirement as at that date.
Following CBN regulatory intervention ascertain the extent of the Bank’s liquidity problem, the apex bank discovered a total of N1.127 trillion overdue obligations that the bank could not settle as at December 3, 2001.
The bulk of the bank’s financial problems were traced to an abortive rice importation deal it ventured into in September 2000, which led to a loss of about N1 billion.
As at December 2002, the bank’s prudential ratios showed that its liquidity ratio (L/R) stood at –20.77% against the minimum requirement of 40%, while its capital adequacy ratio (CAR) stood at –43.18% against the minimum required CAR for banks of 8%.
The total risk assets of the bank was about N5. 67 billion out of which about N4.36 billion,
representing 76.9 percent, had become
delinquent, apart from a loss of N284.87 million declared for the period ended February 28, 2002.
