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20-year after liquidation; NDIC facilitates dividend payouts to staff, customers of failed Peak Merchant Bank

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The Nigeria Deposit Insurance Corporation (NDIC) has announced its intention to disburse liquidation dividends to depositors and former employees of the now-defunct Peak Merchant Bank, marking a significant development two decades after the bank’s liquidation by the Central Bank of Nigeria (CBN).

In a statement issued by the NDIC, the institution, acting as the official liquidator of failed banks in Nigeria, has finalized preparations to initiate the distribution of the first liquidation dividend. This move underscores the NDIC’s commitment to fulfilling its mandate and addressing the financial interests of the affected stakeholders.

The Director of Communication and Public Affairs at NDIC, Bashir A. Nuhu explained that this process will enable depositors who had accounts with the defunct bank to verify and ascertain their account details and balances as of the bank’s closure.

Nuhu stated, “We encourage eligible stakeholders of the defunct bank to visit any NDIC office or access the NDIC website for the verification of their claims, which commenced yesterday and will continue until October 16.”

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The Central Bank of Nigeria (CBN) had taken the decisive step of revoking the banking license of Peak Merchant Bank in February 2003, in accordance with Section 12 [d] of the Banks and Other Financial Institutions Act (BOFIA) 1991, as amended.

Subsequent investigations revealed that the bank’s precarious financial position stemmed from an ill-fated venture into commodity (rice) importation in September 2000, resulting in substantial losses amounting to approximately N1 billion.

The imported rice was unfortunately lost at sea, and the cargo was uninsured, compounding the bank’s financial woes and hindering its ability to meet customer obligations.

It was determined by both the CBN and the NDIC that the bank’s troubles were exacerbated by an ineffective and incompetent board and management, insolvency, and the undue influence of the bank’s chairman, who also held a significant stake in the institution.

This move by NDIC to disburse liquidation dividends represents an important step in addressing the long-standing concerns of depositors and former staff affected by Peak Merchant Bank’s closure, providing them with a measure of financial relief.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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