By Obinna Chima

The Central Bank of Nigeria (CBN) Friday said it has withdrawn the banking licenses of Spring Bank Plc, Afribank Plc and Bank PHB Plc, saying that the three rescued banks have not shown the necessary capacity and ability to beat the September 30 ,2011 recapitalisation deadline.

A statement from the apex bank also expressed support for the decision by the Nigeria Deposit Insurance Corporation (NDIC) to adopt the ‘Bridge Bank Mechanism.’
Specifically, the CBN said it has issued banking licenses to three Bridge Banks.
Managing Director and Chief Executive Officer, NDIC, Mr. Umaru Ibrahim, who briefed the media in Lagos Friday, listed the three Bridge Banks as : “MainStreet Bank Limited, Keystone Bank Limited and Enterprise Bank Limited.
He said the new banks will become operational from Monday adding that the decision to create the Bridge Banks was in line with the NDIC Act.

According to Ibrahim, the corporation consulted with the CBN and Federal Ministry of Finance, before establishing the Bridge Banks which are temporary banks set up by a regulator to administer the deposits and liabilities of [b]a failed bank.[/b]

The NDIC also said the assets and liabilities of the aforementioned financial institutions have been taken over by the Bridge Bank.
The CBN and NDIC had in 2009, carried out a special examination of all the 24 banks in the country. Then, 10 banks were adjudged to be in grave state as they were deficient in capital adequacy. Afterwards, two of the affected banks – Wema Bank Plc and Unity Bank had recapitalised.

The CBN which fixed a September 30 deadline for the recapitalisation of the remaining had earlier threatened to liquidate any bank that fails to beat the deadline.

It later threatened to nationalise any of the banks that fails to scale the recapitalisation hurdle.
It however soft pedalled, and threatened to nationalise the banks.

Union Bank Plc, Intercontinental Bank Plc, FinBank Plc and Oceanic Bank International Plc have all reached advanced stages in their respective recapitalisation process.
But the NDIC boss disclosed that Equitorial Trust Bank Limited (ETB), one of the rescued banks, is currently in the final stage of its negotiation with a prospective investor, adding that there were strong likelihood that the bank will meet the September 30 deadline.
Ibrahim said: “MainStreet Bank Limited has assumed the assets and liabilities of Afribank, while Keystone Bank Limited has assumed the assets and liabilities of Bank PHB. Enterprise Bank Limited has assumed the assets and liabilities of Spring Bank.”
He said the three Bridge Bank are local banks. With this arrangement, Ibrahim said a fresh management will be appointed to manage the banks from Monday. Commenting on the move by Fidelity Bank Plc to acquire Afribank Plc, he said the “Board of Afribank decided that they will not go along with Fidelity.”
The NDIC boss stressed that the corporation was encouraged by the provision of the Bridge Bank option in the law governing the country, to resolve the problems in the banking industry.

Ibrahim insisted that the Bridge Bank option was adopted to prevent the liquidation of the banks, which he pointed out, may have dire consequence on depositors and may also undermine public confidence in the banking system.

He added: “The essence of establishing a Bridge Bank is to provide for continuity essentially in banking service and to protect depositors. It is an arrangement with ensures that no depositor loses his money. By Monday if you are a depositor in any of these banks, you can knock at the door and get your money and it will continue like that, unlike in a situation where you liquidate the banks.
“In the past, we have seen depositors die once a bank is liquidated. But here, you (depositors) have an umbrella that provides you with total protection, until when we are able to get investors to recapitalise these banks.”

Ibrahim said further: “The Bridge Bank option is a veritable tool for enhancing depositors’ operations and promoting confidence by ensuring seamless continuity of banking operations. The NDIC will operate the Bridge Banks until such a time that we engage the Asset Management Corporation of Nigeria (AMCON) with a view to capitalising the Bridge Banks.

“AMCON is expected to open up negotiation with investors with investors who may be interested in capitalising the Bridge Banks. With this action, a resolution of the crisis in the Nigerian banking system is assured, as it brings certainty and stability to the banking system. It is worthy of note, that unlike other parts of the world where depositors lost funds in the resolution of banking crisis, no depositor lost any fund in this reform process in Nigeria.”

Director, Assets Management, NDIC, Mr Adeleke Adedayo, explained further, saying from Monday, “there will be no bank in Nigeria operating as Afribank, Spring Bank and Bank PHB. The three banks that we have created are the banks that have acquired the assets and liabilities of the banks. If you have money with any of these banks, if you want to use your ATM or from the banking hall, you can go there and withdraw you money.


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These banks have been declared failed, fellow Nairalanders shine ya eye rush to the banks if they open on Monday to withdraw your cash,the names of the bridge banks are even scary, no matter what with the global financial crunch I doubt if these cacass banks will survive till December, when they will finally sink.

Any staff affected by these banking uncertainty should be adequately compensated without delay.

I wish the CBN and NDIC the best as they manage the challenge ahead.

Good work there  by the police we should never encourage extra-judicial killings by anybody; police or other law enforcement agents or other members of the public, no matter how we distrust our law enforcement agents(police and Judiciary) or how corrupt  or slow we think they are in arriving at justice.
These innocent souls would have been set ablaze  for no reason other than mere rumour for which the possibility of a  a set-up cannot be ruled out;These practice is becoming a daily occurrence in the south so many of them are not reported should  and it should not be encouraged. I recently watched a horrible video on face book of a young man who was beaten and burnt alive until he died ; this occurred   in Lagos. Unfortunately some people on this forum who are supposed to be educated will be quick to condemn all northerners if this act were to  have been done in the north; let all Nigerian bigots always check their conscience before condemning other parts of the country.