Weary of what it calls a cumbersome court process, the Nigeria Deposit Insurance Corporation (NDIC) is to explore alternative dispute resolution (ADR) for debt recovery, its Managing Director, Umaru Ibrahim, has said.
The corporation, he said, discussed with judges at debt recovery conferences in Abuja, Lagos and Port Harcourt on the need to resolve bad loan cases outside the court, adding that debt recovery is a difficult task that has to be tackled with extra efforts and mutual understanding.
“Debt recovery is a herculean task, but we are making progress. There is need to adopt alternative dispute resolution in solving pending debt issues in the banking industry. We had a conference with Judges on the need to resolve debt issues with bank customers outside the court,” he said.
Contending that going to court was expensive and in many cases nothing came out of it.
Ibrahim said the cumulative debt recovery for the closed commercial banks from 1994 to date, stood at N23.33 million as against N22.26 million in December 31, 2011. This is an increase of N1.074 million, representing 4.83 per cent.
Also, cumulative debt recoveries from closed microfinance banks (MfBs) as at September 2012 stood at N41.97 million, as against N13.57 million recovered as at December 2011. That showed an increase of N28.40 million, representing 209.29 per cent as at September 30, 2012.
He said N19.6 million had been realised from the sale of physical assets as at September 2012 from closed commercial banks. Also, N154.54 million had been realised from the sale of physical assets of closed MfBs from January to September 2012.
About 698 MfBs and Primary Mortgage Institutions (PMIs), he said, paid N980.79 million as premium to the corporation as at September 30, 2012 as against N1,06 million collected from 765 of them same period of 2011, a decline of 8.02 per cent.
As at September 30, 2012, 130 MfBs and 20 PMIs could not be assessed for premium collection as they failed to submit their certified deposit statements as well as call reports since December 31, 2011. He said the corporation is still prevailing on the banks to ensure that it obtains their certified deposit liabilities statements or call reports.
He said the regulators were to issue new licences to microfinance banks that wanted to enter the market.
According to Ibrahim, NDIC paid N6.68 billion insured deposit to 527,950 depositors of liquidated commercial banks as at September 30, 2012 as against N6.63 billion paid to 527,942 depositors as at December 31, 2011, an increase of 0.70 per cent.
The NDIC boss said the corporation conducted a joint risk assessment examination of commercial banks with the Central Bank of Nigeria (CBN) during which the later led 11 banks while it led seven banks.
The exercise, he said, was meant to find out the asset quality of the banks to determine provisions required, a precondition for approving their accounts for publication.
The CBN also conducted an examination of the three banks acquired by the Asset Management Corporation of Nigeria (AMCON) namely: Mainstreet Bank Ltd, Enterprise Bank Ltd. The Keystone Bank examination was led by NDIC.
Ibrahim said the assessment was meant to determine the regulatory compliance and financial condition of the banks in the first five months of their existence. Also, out of the 291 MfBs and PMIs assigned for examination by the NDIC, a total of 207 had been examined. The examination of the remaining 84 banks slated for this quarter is still ongoing even as the report of the 186 out of the 291 MfBs scheduled for examination in the year had been concluded and forwarded to the boards of the respective banks and NDIC management for appropriate supervisory action.
On statutory returns, he said N61.303 billion was collected as premium for commercial banks as assessment for 2011, the Deposit Insurance Fund (DIF) stood at N415.393 billion as at September 30, 2012. This, he said, is an improvement from N354.09 billion recorded as at December 2011, an increase of N61.303 billion or 17.31 per cent.
The NDIC boss also said a total of N2.64 billion out of the N4.67 billion insured deposits belonging to 73,000 depositors of microfinance banks in liquidation had been settled.
He said to date, the corporation had, in addition to payout, deployed purchase and assumption and bridge bank option in resolving failures of banks in the country.
