Failed banks’ asset auctions rake in $29m – DPC

The Deposit Protection Corporation (DPC) has recovered over $29 million from debt collection and sale of assets belonging to six failed banks in the last five years. The DPC is an independent institution that Government put in place to protect depositors in case of bank failures. The institution immediately pays out a minimum of $1 000 per account to all account holders whose funds are trapped in a failed bank.

Those with more than $1 000 in their accounts will, if possible, be compensated in full when the closed institution has been liquidated.

And over the past five years a number of many indigenous banks have fallen by the way side due to a concoction of poor corporate governance issues such as abuse of depositors’ funds.

“Auctions for movable and immovable assets have been conducted for six closed banks under liquidation since 2012,” the DPC said in response to e-mailed questions from New Ziana.
“Over $29 million has been realised from debt collection and disposal of assets for the six closed banks.”

The DPC recently sold assets belonging to Trust Bank in what the auctioneer, Hammer and Tongues described as “the biggest auction sale in the country’s history.”
The institution said it derived powers to dispose of the assets of failed banks from the Companies Act.

“The DPC has used auction sales to dispose movable assets of closed banks as the auction enables the liquidator to realise the assets at the most reasonable price within the shortest possible time,” the institution said.

“In addition, due to the competitive nature of auctions, most goods are usually sold above the reserve values.”

Funds mobilised from the sales are not only used to settle creditors’ claims but also meet the expenses of the liquidation process.

The DPC said it had to date successfully compensated small depositors affected by the bank closures while encouraging those who had not made claims to do so.
Besides Trust Bank other failed institutions that have had their assets sold via the auction system include Allied and Royal Bank. – New Ziana.