Whither the bank and the trust?

Today is World Consumer Rights Day. Consumers of banking and financial services in Nigeria would have loved to join their counterparts all over the world to commemorate and celebrate this Special Day. But that will not be; their minds worry that customers of Savannah Bank of Nigeria (SBN) Plc are still in agony, suspense and with loads of questions in their hearts, 15 years after.

Into Savannah Bank of Nigeria Plc – a bank licensed, regulated and supervised by the Central Bank of Nigeria (CBN) – many customers deposited their money, confident they would withdraw same when needed. Contrary to their expectations, they woke up one morning and beheld the unsavoury news that SBN’s licence had been withdrawn by the CBN. The day before, they had no inkling whatsoever that the bank had any problem with its regulator and thus, made no preparations for the heart-breaking event of the next day, now in its fifteenth (15th) year. The news was devastating and the events that followed have made it to remain so till date. Their financial, economic and social circumstances, among others, have deteriorated. Worse still, they have no clue when, if ever, the authorities will formally pay them either their entire deposits (with interest accrued) or at least, the insured amount, to enable them push-ahead what remains of their lives.

On this 2017 World Consumer Rights Day, it is fitting to recall that SBN’s operating licence was withdrawn by the CBN on February 15, 2002. The bank challenged CBN’s action in the law court; the Court of Appeal in Abuja restored the licence in 2009.

Following the restoration of SBN’s licence, the Nigeria Deposit Insurance Corporation (NDIC), the undertaker that CBN had handed over the bank’s assets and liabilities for liquidation and payment of insured amounts to the bank’s depositors could not proceed with the statutor responsibilities. Rather, the Corporation returned the assets and liabilities to owners and management of SBN. Among the assets returned were the bank’s 104 branches; a total of N910 million (i.e. N450m in 2009 and N460m in 2011); and USD 1.029 million in 2011.

In order to facilitate re-commencement of operations by SBN, the CBN and NDIC, set up a Joint Committee to work with SBN’s Team. The Committee was reported to have made ‘’strenuous efforts’’ to get SBN to resume operations “in the interest of its depositors who have been suffering untold hardship since 2002 when the licence of SBN was withdrawn and the re-instatement since 2009”.

For the over 15 years that SBN’s issue arose, the results the “strenuous efforts” of the Committee yielded are, among others, non-resumption of operations by SBN; lack of situation report from either CBN or SBN to the depositors and other customers of the bank; and uncertainty as to whether SBN will ever resume operations and if so, when?

Expectedly, non-commencement of services by SBN has had multiple negative implications which include: SBN’s continued illegal and insensitive withholding of depositors’ funds; frustration and disillusionment of depositors of the bank; depositors’ increasing lack of confidence in the ability of CBN/government to get the bank to re-commence services; preventable sicknesses and untimely death of many depositors as a result of lack of funds to cater for their health; denial of basic economic and social benefits to family members, employees and creditors of the depositors; financial setback and even closure of shops by many businesses of the bank’s customers; worsening unemployment and poverty levels as well as other social problems in the country; wasting away of assets of the bank, including landed property scattered all over the country; making no positive contributions to the economy. Perhaps, the worst is that borrowers from the bank, majority of who are likely to be its directors, are somewhere enjoying depositors’ funds without any pressure on them to repay the loans.

Given the foregoing and in the interest of SBN’s customers whose rights as consumers have not only been trampled upon but deliberately denied, it has become auspicious that, in a special day as this 2017 World Consumer Rights Day, cogent questions are raised and demands are made to facilitate actions that will liberate the customers from the unholy grip of SBN.

Some of such questions are: why has SBN not resumed operations eight years after re-instatement of its licence?; what are the outstanding regulatory conditions that the bank ought to meet prior to resumption of operations and why are they outstanding?; if SBN has not complied with the condition(s) eight years after regaining its licence, is there the likelihood that it will within year 2017?; will SBN ever resume operations, if so, how much longer must customers wait?; who is in custody of the depositors’ funds?; and finally, what arrangements are being made to release to all depositors their money being illegally withheld by SBN for the last 15 years?

The customers have remained unusually silent and patient, bearing their ‘crosses’ with equanimity. But the elasticity of their patience has, no doubt, been drawn to breaking point. In the best interest of SBN and the entire banking system, the over-stretched patience must not be allowed to snap. Any restiveness by such ‘wounded’ group will have unfathomable implications. This is even more so as they have the sympathy of other banks’ customers, a coalition of consumer advocacy and protection groups and indeed, the general public, all of who rightly believe that similar fate can befall them. If they take up their ‘drums’, heavens may find it challenging to silence them without repercussions. It must be appreciated that being silent and patient for 15 years over their rights, must not be misconstrued as weakness. They deserve commendation for the restraints they have exhibited. But will anyone blame them now if they make a strategic change?

The Presidency, National Assembly, Judiciary, Central Bank of Nigeria, Consumer Protection Council (CPC), Owners and Directors of SBN should consider the SBN v/s CONSUMERS issue a serious public interest matter that should quickly be addressed. All well meaning stakeholders are in agreement that fifteen (15) years is more than enough time for depositors of SBN to have suffered. Therefore, government should immediately deploy its machinery to give belated justice, as it were, to SBN’s customers. It must not be forgotten that this SBN’s situation has negative promises to government’s on-going financial inclusiveness programme and the ubiquitous parallel economy. In the final analysis however, the two foreseeable solutions are either SBN re-commences services without further delay so that depositors can access their money or the bank is liquidated and insured depositors paid whatever is due to them. All said, let bank customers be accorded their due rights so that they too can join others, the world over, to truly celebrate World Consumer Rights Day.

Dr. Ogubunka is President, Bank Customers Association of Nigeria (BCAN)