The creation of a bridge bank may not come to most Nigerians as a new phenomenon because it was used in the case of the defunct Afri bank and Bank PHB.
Bridge bank laws vary by country, but generally a bridge bank is established by a financial regulatory or a public deposit insurance company or organization.
The primary job of a bridge bank is to provide for the seamless transition from a bank insolvency to continued operations. As such, a bridge bank may perform the following tasks:
Picking up and administering the deposits of a failed bank. Also, honouring the failed bank’s financial commitments with the goal of ensuring that service to retail clients (depositors, borrowers) is not interrupted.
Assuming and continuing the service of outstanding loan commitments so that they are not ended or otherwise disrupted.
Administering all other assets and liabilities, as well as operations of the insolvent bank according to the instructions and wishes of the overseeing banking regulator.
With every passing day, former customers of Skye bank, now Polaris bank, have found all the promises of the central bank Governor to be through in respect of the above promises on Polaris Bank.
