Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Decree No. 18 of 1994: An Appraisal of a Document of Substance and Pitfalls

Abstract

Statistics from the Nigeria Deposit Insurance Corporation show that between 1990 and 1994 banks recorded a total of 6 billion naira fraud. Actual and expected losses to the banks is estimated at 1.4 billion naira. Even at that, these figures are considered a gross underestimate of the true position because “many banks had renged in rendering the required returns on frauds” to the Nigeria Deposit Insurance Corporation.¹

As a result, the Military Regime of General Sani Abacha promulgated the Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Decree No. 18 of 1994, which was amended by Decree No. 18 of 1995. According to Dr. I. I. Goldface Irokalibe,²

“The setting up of Failed Banks Tribunal is a reaction to the nefarious activities of bank executives and their allies who sought to attain better life for themselves at the expense of the larger society by resort to pinching depositors funds with reckless abandon. However high we may seek to hold the banner of human rights in defence of persons appearing before the Tribunal, one fact must remain clear to us, that is, that no man has the right to be happy alone. Those whose business, savings, jobs, contracts, hopes and aspirations have been dashed and destroyed on account of bank failures, also have a right to decent life which society must protect.”