E-Financial
Ex Skye Bank Directors Panic as FG Mulls Punishment for Banking Collapse
Former directors of the defunct Skye Bank Plc are reportedly seeking for soft-landing, following a directive by federal government last week that the former bankers would be used as scapegoat to stop the incessant wrecking financial institutions by their top management staff, according to Business Post.
Last week, Mrs Zainab Ahmed, minister of Finance, directed the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to fully investigate and prosecute all the directors and executive management who contributed to the collapse of Skye Bank as well as other Deposit Money Banks (DMBs) in liquidation.
Mrs Ahmed said the failure of Skye Bank must be used as an opportunity to deal decisively with those behind the collapse so as to serve as a deterrent to other operators in the financial system.
According to her, federal government was no longer prepared to treat such serious infractions with levity.
The had Minister expressed her serious concern about the spate of non-performing loans in the banking industry, adding that while the bail-out of distressed financial institutions was necessary in the interest of the stability of the banking system, emphasis should also be placed on the investigation and prosecution of delinquent board directors and executive management of financial intuitions who abused the trust placed on them by depositors.
Soon after this directive, those fingered to be behind the fall of Skye Bank have started to look for ways to get a soft-landing.
According to sources in the banking sector, some of them have started consultations with their lawyers to see how they would not be “heavily dealt with.”
“I can confirm to you that even before the Minister [of Finance] gave the directive [last week], some of the former directors of Skye Bank had been making efforts to get a soft-landing.
“One thing they are aware of is that they might not escape justice because the forces behind their travails are beyond ordinary,” a top management staff of Polaris Bank, who seriously begged not to be named, told our correspondent at the weekend.
In September 2018, the CBN announced the collapse of Skye Bank, naming Polaris Bank as a bridge bank, noting that afterwards that Polaris Bank would run the financial institution until a suitable buyer is found.
In the past, not much had been done to decisively punish directors of failed banks in the country and in most cases; it is the minority shareholders who bear the brunt.
This has led many to believe that government and regulators are mere toothless bulldog, who find pleasure in making more investors lose confidence in the nation’s economy.
When Skye Bank was liquidated, many blamed the CBN, Nigerian Stock Exchange (NSE) and the Securities and Exchange Commission (SEC) for it.
Observers believed that these agencies did not do enough to protect interests of shareholders by raising the necessary red flags.
During the visit of the Finance Minister to NDIC last week, its Managing Director, Mr Umaru Ibrahim, assured her the corporation will do all it can to assist in the recovery of all the debts owed the defunct Skye Bank and other banks in liquidation.
He also expressed the agency’s determination to ensure that the directors who perpetrated in insider abuse and other illegalities in running the affairs of the bank are investigated and prosecuted by appropriate authorities.
The primary concern of the NDIC, he assured the Minister, is to ensure the safety of depositors’ funds and minimise the disruption of banking services.
Business Post recalled that last month, Mr Ibrahim had said that a former chairman of Skye Bank, Mr Tunde Ayeni, as well as a director of the defunct bank, Mr Festus Fadeyi, were being investigated by government.
He had disclosed that as soon as investigation was finalised, the necessary action would be taken and those found culpable severely dealt with.
“They are being investigated and I can assure you that when the time comes, the necessary security and law enforcement agencies would do their work,” the NDIC chief said on the sidelines of the International Association of Deposit Insurers (IADI) Africa Regional Committee (ARC) workshop in Lagos in September 2018.
It was alleged that Mr Ayeni and Fadeyi contributed to the downfall of the firm by borrowing huge amount of money that were never repaid.
While Mr Ayeni was said to have borrowed billions of Naira from the firm to fund the acquisitions of the Ibadan and Yola Electricity Distribution Companies; NITEL/M-Tel; and an energy services firm, Ascot Offshore Nigeria Limited; Mr Fadeyi, was accused of using Pan Ocean to obtain loans to fund the firm’s oil and gas upstream projects which were considered as one of the major non-performing loans amongst others.
It was said that the funds pulled out of Skye Bank allegedly by the duo and others led to the total collapse of the bank.
Securities and Exchange Commission (SEC) has urged Nigerians to report any suspected illegal investment schemes to the commission for proper investigation and necessary action.
This is in the light of the recent collapse of Crypto Bridge Exchange (CBEX).
The Commission issued a notice on Thursday to the investing public, warning that Ponzi investment schemes pose a significant danger to the growth of the capital market.
In its latest advisory, the Commission highlighted the growing threats and risks posed by Ponzi schemes, illegal investment operations, and unregistered digital asset platforms.
It explained that fraudulent entities and individuals continue to exploit unsuspecting investors with deceptive promises of high returns, often leveraging the allure of digital assets to create a false sense of legitimacy.
“The public is strongly advised to be wary of investment opportunities that promise guaranteed or unusually high returns with little or no risk.
“These include unregistered platforms offering cryptocurrency investments, forex trading, or blockchain-based schemes, without undergoing the prescribed processes to obtain prior approval from the SEC.
“The SEC reiterates in this regard that, ‘If it sounds too good to be true, it likely is.’”
The Commission urged potential investors to conduct thorough due diligence before investing and to verify the registration status of the company or individual offering the investment through the SEC’s website.
The Commission explained that Section 196(3) of the Investments and Securities Act, 2025, criminalizes the promotion and operation of prohibited or unregistered schemes.
“This violation is punishable, upon conviction, by a fine of not less than ₦20 million or a prison term of 10 years, or both,” the Commission warned.
The SEC stated that it is fully committed to identifying and prosecuting offenders to the full extent of the law.
“We encourage the public to partner with the SEC to safeguard the integrity of the investment environment in Nigeria by promptly reporting suspected illegal investment schemes to the SEC,” the notice concluded.
The Nigerian federal government announced that the Electronic Money Transfer Levy (EMTL) generated $49.5 million in revenue, with fintech companies contributing $18 million.
This fund, as reported by the Federation Account Allocation Committee, is a considerable 56.80 percent increase over the $31.6 million earned during the same period in 2024.
Previously, the charge mainly affected established banking institutions. However, fintech firms have been included because they have contributed a phenomenal 2,507.94 percent growth in transaction values since 2020.
The EMTL is part of the government’s attempt to regulate the booming fintech sector, which completed transactions worth $29 billion in 2023 and $49.3 billion in 2024.
The EMTL was created by the Finance Act 2020 as an amendment to the Stamp Duty Act. It charges $0.03 (N50) for electronic transactions of $6.19 (N10,000) or more made through banks and financial institutions.
This tax seeks to capitalise on the increasing expansion of electronic payments, which will exceed $619.70 billion in total transactions by 2024.
In response to the burgeoning fintech sector, the government has increased its tax base, with annual EMTL collections expected to increase by 31.35 percent.
According to the Medium Term Fiscal Framework for 2025-2027, the federal government expects EMTL revenue to reach $142 million in 2025, up from $108 million in 2024.
However, industry experts have expressed concern about the potential impact of additional taxes on users.
Amid mounting macroeconomic uncertainty, Nigerians are leaning heavily towards savings and low-risk financial instruments, with recent data from the Central Bank of Nigeria (CBN) showing a marked increase in quasi-money holdings.
Quasi-money are assets that are easily and quickly convertible into cash. They are considered to be close substitutes for cash in the economy.
According to the CBN’s Money and Credit Statistics for March 2025, quasi-money, comprising savings deposits, fixed-term deposits and other liquid but non-transactional assets, rose to N75.65 trillion, representing a 3.65 per cent month-on-month (m/m) increase and a 26.42 per cent rise year-on-year, up from N59.84 trillion in March 2024.
The surge highlights a growing preference for capital preservation, as households and businesses seek refuge in interest-bearing instruments amid Nigeria’s ongoing economic slowdown.
“The rising volume of quasi money reflects both a cautious approach to spending and increasing trust in formal financial institutions,” said a senior analyst at Vetiva Capital. “It’s a defensive strategy by savers who are navigating inflationary pressures and volatile market conditions.”
The CBN has maintained a tight monetary policy for over a year, with high interest rates designed to tame inflation. This stance has made fixed-income securities, such as treasury bills and term deposits, especially attractive to investors.
In January 2025, the CBN’s auction for 364-day treasury bills saw an oversubscription of N1.47 trillion, with stop rates reaching 22.6 per cent. By mid-February, total subscriptions across tenors remained strong at N2.41 trillion, underlining sustained demand for secure, high-yield instruments.
The data also reveals that broad money supply (M2) grew to N114.20 trillion in March 2025, a 23.69 per cent increase year-on-year, with quasi money continuing to dominate M2 composition. Meanwhile, demand deposits rose to N33.96 trillion, up 17.65 per cent from the same period last year, while currency outside banks jumped 26.72 per cent to N4.59 trillion.
The central bank also reported mixed trends in domestic credit: Net domestic credit rose 12.47 per cent year-on-year to N103.37 trillion, though it dipped 1.20 per cent month-on-month.
Credit to the government grew 31.99 per cent to N25.86 trillion year-on-year but fell 4.63 per cent in March, suggesting a brief pause in government borrowing whilst private sector credit growth remained modest at 7.10 per cent pointing to conservative lending practices and subdued appetite for new debt in the real economy.
Analysts say the quasi-money uptick reflects a broader trend of financial system deepening, driven by digitization and formal banking efforts. The rise in savings could, over time, translate into stronger capital pools for lending, once macroeconomic stability returns.
While the flight to safety is a rational response to uncertainty, experts warn that over-reliance on fixed-income assets could limit economic dynamism in the long term.
However, for now, Nigeria’s financial landscape suggests that stability, not speculation, is the dominant mood among savers and investors.
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