US' failed banks
PHOTO: Bloomberg
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FULL LIST: How 18 U.S Banks Failed In 5 Years – Questions For Nigerian Banks

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After two  major banks failed in just two days (between March 10 and March 12), the U.S Federal Deposit Insurance Corporation (FDIC) on Monday updated its list of failed banks and added two banks – Signature Bank and Silicon Valley Bank (SVB) which  failed in quick succession between March 10 and 12.

Prime Business Africa (PBA) reports that FDIC’s prompt update coming hours after Signature Bank was announced to have been handed over to a bridge bank on Sunday is considered an  interesting development signposting sound  banking regulatory environment.

READ ALSO: Signature Bank Falls: U.S Records Third Largest Bank Failure In History

Concerns For Tech Startups As 2 Big U.S Banks Fail In One Week

Globally, a bank is said to have failed when the regulatory agency – the FDIC in the case of the U.S- closes it. Banks are closed when they fail to meet their obligations to depositors and others.

The table below showcases 18 banks which were taken over by the U.S banking regulator for failing to meet customer demands in five years.

List Of Failed Banks and Acquiring Banks in United States From 2017 to 2023

SNFailed BankCityStateAcquiring BankDate
1Signature BankNew YorkNYBridge Signature BankMarch 12, 2023
2Silicon Valley BankSanta ClaraCADeposit National Insurance Bank of Santa ClaraMarch 10, 2023
3Almena State BankAlmenaKSEquity BankOctober 23, 2020
4First City Bank of FloridaFloridaFLUnited Fidelity Bank, fsbOctober 16, 2020
5The First State BankBarboursvilleWVMBV Bank IncApril 3, 2020
6Ericson State BankEricsonNEFarmers and Merchants BankFebruary 14, 2020
7City National Bank of New JerseyNewarkNJIndustrial BankNovember 1, 2019
8Resolute BankMaumeeOHBuckeye State BankOct 25, 2019
9Louisa Community BankLouisaKYKentucky Farmers Farmers Bank CorporationOctober 23, 2019

 

10The Enloe State BankCooperTXLegend Bank, N.AMay 31, 2019
11Washington Federal Bank for SavingsChicagoILRoyal Savings BankDecember 15, 2017
12The Farmers and Merchants State Bank of Argonia

 

ArgoniaKSConway BankOct 13, 2017

 

13Fayette County BankSaint ElmoIL United Fidelity Bank, fsbMay 26, 2017
14Guaranty Bank, (d/b/a Best Bank in Georgia & Michigan)MilwaukeeWIFirst- Citizens Bank and Trust CompanyMay 5, 2017
15First NBC BankNew OrleansLAWhitney Bank April 28, 2017
16Proficio BankCottonwood HeightsUTCache Valley BankMarch 3, 2017
17Seaway Bank and Trust Company

 

ChicagoILState Bank of TexasJanuary 27, 2017
18Harvest Community Bank

 

PennsvilleNJFirst-Citizens Bank &Trust CompanyJanuary 13, 2017

SOURCE: FDIC

The breakdown shows that so far this year, two banks failed in just 2 days; four (4) failed in 2020; Four in 2019; and eight (8) in 2017.

This raises questions for Nigerian banks, which presently are unable to dispense cash to millions of depositors in the last two months. It casts aspersions on Nigeria’s Central Bank’s handling of  banks’ failure to disburse cash on demand.

In Nigeria, customers have not been able to withdraw money from their deposits because banks have no cash and could not meet cash demands from depositors. The Central Bank of Nigeria (CBN) has continued to insist that it delivered enough of the new naira notes to banks which it accused of disbursing the notes to politicians ahead of the 2023 elections.

The apex bank said part of the reasons for the naira redesign was to curb vote buying in Nigeria’s elections.

Since the CBN introduced the currency redesign policy alongside its cash withdrawal limits, banks have insisted they have no new notes to release to customers.  This has led to at least two months of long  queues in banking halls and Auto Teller Machines (ATMs) across the country.

The scarce Naira notes in banks were sold by Point of sale agents on streets, just as many traders rejected electronic transfers for fear of hitches.

The situation got worse after the Supreme court ruled against the CBN’s January 31 deadline for return of old N200, N500 and N1000 notes, forcing banks to accept old naira notes. This compounded the situation creating legitimacy issues for the old notes and more confusion for banks and citizens as CBN refused to make clear statement on whether, or not, it would obey the court ruling.

READ ALSO: Emefiele Directs Bank CEOs To Start Accepting, Disbursing Old Naira Notes

Mr Christopher Nkuma, an Accountant, said he withdrew N5000 of old notes from a bank in Lagos but could not spend it because, according to him  traders were not sure the notes were still legal tender despite the apex court’s ruling.

“Two days after, I returned  to Zenith Bank to deposit the N5000 which comprised old N500 notes, but to my greatest surprise, the bank refused to accept the notes they issued me two days earlier,” Mr Nkumah said.

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Uduegbunam Chukwujama
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