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.
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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
|SN||Failed Bank||City||State||Acquiring Bank||Date|
|1||Signature Bank||New York||NY||Bridge Signature Bank||March 12, 2023|
|2||Silicon Valley Bank||Santa Clara||CA||Deposit National Insurance Bank of Santa Clara||March 10, 2023|
|3||Almena State Bank||Almena||KS||Equity Bank||October 23, 2020|
|4||First City Bank of Florida||Florida||FL||United Fidelity Bank, fsb||October 16, 2020|
|5||The First State Bank||Barboursville||WV||MBV Bank Inc||April 3, 2020|
|6||Ericson State Bank||Ericson||NE||Farmers and Merchants Bank||February 14, 2020|
|7||City National Bank of New Jersey||Newark||NJ||Industrial Bank||November 1, 2019|
|8||Resolute Bank||Maumee||OH||Buckeye State Bank||Oct 25, 2019|
|9||Louisa Community Bank||Louisa||KY||Kentucky Farmers Farmers Bank Corporation||October 23, 2019|
|10||The Enloe State Bank||Cooper||TX||Legend Bank, N.A||May 31, 2019|
|11||Washington Federal Bank for Savings||Chicago||IL||Royal Savings Bank||December 15, 2017|
|12||The Farmers and Merchants State Bank of Argonia|
|Argonia||KS||Conway Bank||Oct 13, 2017|
|13||Fayette County Bank||Saint Elmo||IL||United Fidelity Bank, fsb||May 26, 2017|
|14||Guaranty Bank, (d/b/a Best Bank in Georgia & Michigan)||Milwaukee||WI||First- Citizens Bank and Trust Company||May 5, 2017|
|15||First NBC Bank||New Orleans||LA||Whitney Bank||April 28, 2017|
|16||Proficio Bank||Cottonwood Heights||UT||Cache Valley Bank||March 3, 2017|
|17||Seaway Bank and Trust Company|
|Chicago||IL||State Bank of Texas||January 27, 2017|
|18||Harvest Community Bank|
|Pennsville||NJ||First-Citizens Bank &Trust Company||January 13, 2017|
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.