There was another stinking revelation at the Senate yesterday, as the upper legislative chamber named directors of 50 failed banks in N49 billion deals, expressing dissatisfaction with the inability of the Central Bank of Nigeria (CBN) to pay depositors of failed banks.

This was contained in the report of the Senate Committee on Banking, Insurance and Financial Institutions presented by the Chairman of the Committee, Senator Nkechi Nwaogu.

The Senate specifically indicted the Nigeria Deposit Insurance Corporation (NDIC) for failing to protect depositors' funds trapped in failed banks.

According to the report of the committee, "Senate's attention was drawn to the untold hardship suffered by many Nigerians who deposited their money in some failed banks and financial institutions, alleging that the NDIC being the statutory body empowered to protect depositors' funds had failed to carry out its responsibilities in spite of the promise by the governor of CBN sometime in 2006 that depositors of the post-consolidation failed banks would be paid within six months of bank closure.

"The NDIC has not satisfactorily met its obligations because numerous complaints persist from depositors who have not been paid their (trapped) deposits…

"With a balance of N1, 937, 235, 788.21 left unpaid, the NDIC has not provided reasons why there is still an outstanding payment to insured depositors. It has also not been doing enough to reach these depositors.

"The sum of N6, 089,216,724.64 was paid as liquidation dividend but the NDIC did not state how much has been realised from the sales of assets to pay these dividends.

"Insider-related credits may have contributed towards the failure of banks who could not meet the N25 billion minimum capital base. From a total of N53, 304,978,684.83 taken as loans by various directors of the failed banks, only N4, 752,983,380 has been recovered as at August 30, 2008.

"Un-recovered insider credits to the tune of N1,088,768,358.39 may have contributed to the failure of these banks. But the corporation claimed it had referred several directors of the failed banks involved to the Economic and Financial Crimes Commission (EFCC) and to the Special Fraud Unit of the Nigeria Police for investigation and prosecution."

Contributing to the debate, Senate Services Committee Chairman, Effiong Dickson Bob, said: "I am ashamed of insider dealings by the directors of failed banks. Is it not shameful that directors who ran aground the banks are not only enjoying their loot but are now directors in many of the new banks, continuing with the same case of insider dealing?

"This is the time for this Senate to take serious action against the NDIC because they have failed. Most senators are under pressure because depositors in the failed banks have made our offices their own office now.

"They throng our office on a daily basis, asking us to write introductory letters for them to take to the NDIC to retrieve their deposits."

Others that spoke on the report include Senator Ibrahim Ida, Patrick Osakwe and Enyinnaya Abaribe who expressed dissatisfaction.

According to Senator Ida, the insurance was as good as a fraud system.

Apparently not prepared to rely on the promises of the CBN, the Senate directed the committee to conduct a public hearing to unveil those responsible for the failed banks.

The NDIC has also been mandated to report the current status of prosecutions of directors and management staff of all the pre-and post-consolidation failed banks involved in insider credit dealings on a quarterly basis.

It directed that CBN and NDIC should make the revalidation of accounts optional.

The Senate further directed the NDIC to report the recovery status of insider credit of banks that failed prior to and after the 2005 bank consolidation to the committee.