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Following the bank failure wave that marred the banking industry this decade, the Deposit Protection Corporation (DPC) has filed liability actions against the former directors of the failed banks. DPC is the institution that was created to maintain public confidence and encourage stability in the financial system by guaranteeing compensation to customers of insolvent banks.
By taking legal action, DPC is living up to its word after it promised back in 2016 that it will sue top management of banks for gross negligence. Directors from Interfin, Royal bank, AfrAsia and Trust bank are in the line of fire and are set to appear in court for failing to exercise due to lack corporate governance and mishandling depositor’s funds.
DPC appears to be pursuing directors who should have been aware that they were pursuing risky and potentially negligent lending strategies. DPC’s Chief Executive, John Chikura said;
We have sued them (directors of four) failed banks over lack of corporate governance and abuse of depositors’ funds. The four directors are from Interfin, Trust Bank, AfrAsia (formerly Kingdom Bank) and Royal Bank
The accused directors are said to be ready to defend themselves against DPC’s charges, as Mr. Chikura put it;
They have not appeared in court but they have all indicated to the court that they are prepared
to defend themselves
Meanwhile, DPC is in the process of compensating depositors of failed banks including AfrAsia, Allied Bank, Genesis Investment Bank, Capital Bank, Royal Bank, Trust Bank and Tetrad Investment Bank, to a maximum insurable limit of $500. However, the DPC is still stuck with unclaimed money by customers of failed banks.
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