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Tag: NDIC

  • Ex-bankers to file fresh suit against CBN, NDIC, others over N9.8b entitlements

    Ex-bankers to file fresh suit against CBN, NDIC, others over N9.8b entitlements

    Barring any last minute hitch, over 10, 000 former bankers who filed a class action suit through the Registered Trustees of the Association of Ex-Staff of Non-Consolidated Banks of Nigeria at the National Industrial Court, Lagos Judicial Division have resolved to file individual suits.

    Confirming this development at the weekend in a telephone interview with our correspondent was the counsel to the aggrieved ex-bankers, Bar. Daniel Omotilewa.

    According to him, this move followed the striking out of the subsisting suit in court last Thursday by Justice Benedict Kanyip.

    Expatiating, he said, “We’re just been tactical about the whole thing.

    Definitely we’re withdrawing the case to file a fresh one. We came to this court under the umbrella of Registered Trustees of the Association of Ex-Staff of Non-Consolidated Banks of Nigeria and since we foresee a challenge that we may not be able to follow through with this action with our prayers in this court, the wisest thing do under the circumstances was to take a new path,” he said.

    Thankfully, he said: “All the affected members of the group are all in agreement with the new line of action. What we want to do now is to compile the comprehensive list of those affected as we plan the next line of action at the court,” he said.

    The lawyer who hinted that the fresh case will be filed later this week, was however quick to admit that the resumed date of hearing of the fresh is at the discretion of the court.

    Echoing similar sentiments, the chairman of the group, Magnus Maduka, while addressing journalists said: “We decided to restrategise because there are certain development. There is no way we can continue the way we are going and succeed unless we factor in some of the things we know.”

    “We were trying to explore the possibility of not going to court at all these past years believing that the CBN and NDIC and the banks concerned would do the needful. But it does appear that we may have to wait forever and that is why we decided to take the matter before the court to get justice for all the affected parties,” Maduka stressed.

    It may be recalled that the consolidation exercise introduced by the then CBN governor, Prof. Chukwuma Soludo which swept through the banking sub-sector, left some banks defunct as a result of their inability to meet the new N25billion capital benchmark.

    Consequently, over 10, 000 ex-staff of banks have sued the Nigeria Deposit Insurance Corporation (NDIC) and the Central Bank of Nigeria (CBN) over non-payment of their N9.8billion gratuities 11 years after they were retrenched.

    Also joined in the suit are Ecobank Nigeria Plc, UBA Plc, Skye Bank Plc and Zenith Bank Plc.

    The claimants had instituted the action on behalf of the ex-staff of eight banks including: Allstates Trust Bank, Assurance Bank, Eagle Bank, Gulf Bank, Hallmark Bank, Liberty Bank, Metrolpolitan Bank and Trade Bank respectively.

    A breakdown of the claimants’ gratuities showed that Allstates and Hallmark Bank both acquired by Ecobank were owed over N7billion.

    Besides, UBA which acquired Gulf Bank, Liberty Bank, Metropolitan Bank and Trade Bank owed ex-staff of the respective banks over N1.3bn just as Skye Bank and Zenith Banks were owing over N600m and N22million.

  • NDIC pays N105b to failed banks’ depositors

    NDIC pays N105b to failed banks’ depositors

    The Nigerian Deposit Insurance Corporation (NDIC),  has paid N105 billion to 442, 615 depositors of closed Deposit Money Banks (DMBs). the Managing Director, Umaru Ibrahim has said.

    Umaru said the figure was as at the end of September, 2017.

    Similarly, the Corporation paid a cumulative sum of N2.88 billion to 525, 009 depositors of closed Microfinance banks (MfBs), as well as N60 million to 756 depositors of closed Primary Mortgage Banks (PMBs).

    Ibrahim, who spoke at the NDIC Special Day at the just concluded 38th Kano International Trade Fair, said: ”It is equally important to draw the attention of members of the public to take advantage of the numerous incentives available to save and have financial services. Depositors are also guaranteed by NDIC in the event of bank failure upto a minimum if N500, 000 in commercial, Merchant/Mortgage Banks/Mobile banking subscribers, while N200, 000 in a Micro-Finance Bank”.

    Ibrahim, explained that the corporation has paid liquidation dividends to customers, whose deposits are in excess of the insured sums upon the sale of fiscal assets of the closed banks and debt recovery. However, he stressed the need for depositors to patronize inly financial Institutions that are licensed by the CBN and which display the NDIC sticker: ” Insured by NDIC” in their banking halls and entrances, so as to avoid patronizing dubious fund managers, otherwise, known as ‘Wonder Banks’.

    He also, said that :” There is also the emerging trend of investing in digital currencies, popularly known as Bitcoins, which has serous dangerous consequences, like the ‘Wonder Banks’ because the digital currencies are not licensed by the CBN and therefore not insured by NDIC’.

  • Reps go after CBN, NDIC, banks over NERFUND’s N17b debt

    The House of Representatives has commenced the investigation of Central Bank of Nigeria (CBN) over the failure of the National Economic Reconstruction Fund (NERFUND) to recover over N17 billion owed it by small and medium scale enterprises’ owners.

    In addition, while the Nigerian Deposit Insurance Corporation (NDIC) was expected to assist the investigation with its roles over the recovery of the debt, some money deposit banks would have to shed light on what was responsible for the debt that has led to the near extinction of the fund.

    The mandate of the fund to galvanise the economy was to provide loans for Small and Medium Enterprises (SMEs) through participating banks but the huge debt has led to a planned shutting down of the activities of the fund by the Federal Government.

    The House  has, however, said that shutting  down the activities of NERFUND by fiat is inappropriate in a democracy.

    Though the House had earlier called for the suspension of the planned shutdown, the  lawmakers said they will rather take a critical look into the events that led to its over N17 billion debt.

    Speaking yesterday at the inaugural meeting of the 19-member ad hoc committee, Ayodele Oladimeji (PDP, Ekiti), who chaired the panel, said high profile debtors to the fund as well as the condition of the projects that benefitted from the loans, in addition to the roles played by the intermediary banks would be investigated.

    According to him, the inability of NERFUND to recover its debts was suspicious as the laws establishing it gave the CBN the powers to debit the accounts of defaulting banks.

    According to him, NERFUND loans have guarantors, which are the participating banks, which meant that loans can only be obtained  through the participating banks.

    Any loan not given through a bank is illegal, he said.

    Oladimeji said failure of NERFUND to recover its loan was a mystery to the committee as the law also made provision for the NDIC to recover money for depositors from distressed banks.

    He said the fate of the new Development Bank of Nigeria  (DBN) may not be different from that of NERFUND since they shared similar responsibilities.

    Declaring open the inaugural meeting, Speaker Yakubu Dogara said the role played by intermediary banks was critical to the investigation.

    The Speaker, who was represented by Olabode Ayorinde  (APC, Ondo), advised the committee not to shy away from invoking its full powers to discharge its duties and responsibilities as assigned by the House with a view of protecting and developing the resources and the economy of the country.

  • CBN, NDIC urge banks to return to Northeast

    CBN, NDIC urge banks to return to Northeast

    Bankers’ Committee to step in

    There are ongoing moves by the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) to get commercial banks and microfinance banks to return to the troubled North-East region, NDIC Managing Director, Umaru Ibrahim, has said.

    Speaking yesterday at the ongoing NDIC Annual Workshop for financial journalists in Kano, Ibrahim, called on the CBN to provide incentives for commercial banks and microfinance banks to come back to the North-east after they closed shops because of the impact of the Boko Haram on their operations.

    He said the Northeast has potentials to support economic growth and should be supported by banks to achieve the desired result. He spoke on the theme: “The Nigerian banking sector: Challenges, opportunities and the way forward.”

    He said: “Many bank CEOs have forgotten the economic potentials that exist in the Northeast. We need to awaken the banks to see the economic potentials in the Northeast. During the next special Bankers’ Committee meeting, the Northeast infrastructural revival will be discussed. The CBN already has plan to rebuild the Northeast,” he said.

    He called on the CBN and other major stakeholders in the financial system to rebuild the financial infrastructure in the troubled North-East region.

    He said the activities of insurgents in the region in the last few years have led to huge damage of financial infrastructure in the region.

    The NDIC boss disclosed that given the crisis in the North-East region, so many businesses have been adversely affected while some investors have moved their investments out of that region.

    He said the rate at which people are being financially excluded in the region has increased due to lack of adequate provision of financial services which was caused by insurgents.

    The NDIC boss said he would personally table the issue to the Bankers’ Committee during their next meeting so that concrete steps could be taken to address the problem.

     

  • Banking fraud on the decline, says NDIC

    Banking fraud on the decline, says NDIC

    … Recommends prohibition of Directors of financial institutions from obtaining credits
    The banking industry has recorded a decline in the rate of successful fraud incidences and extent of amount of losses in 2016, compared to 2015.

    The Managing Director/Chief Executive, of the Nigeria Deposit Insurance Corporation (NDIC) Alhaji Umaru Ibrahim, made this disclosure while delivering a lecture: “The Role of NDIC in Mitigating Corruption in the Nigerian Banks” at the general meeting of the Abuja Chapter of the Alumni Association of the National Institute (AANI).

    The NDIC boss however lamented the rising trend in the level of banks’ non-performing loans (NPLs) and stated that the NDIC had recommended the prohibition of Directors of licensed banks, including microfinance banks (MFBs) and primary mortgage banks (PMBs) from obtaining credit facilities from their respective banks.

    Ibrahim pointed out that the NDIC collaborated with other stakeholders such as the Economic and Financial Crimes Commission (EFCC), Police Special Fraud Unit (PSFU) and the Financial Malpractices Investigation Unit (FMIU) to conduct investigations into banking malpractices.

    Regarding the drop in successful fraud cases in banks, Ibrahim who was represented by a Deputy Director in Research, Policy and International Relations Department, Mr. Hashim I. Ahmad, noted that “the reported cases of frauds, forgeries and outright theft involving bank staff recorded a huge decline of 48.12 percent from N18.02 billion in 2015 to N8.68 billion in 2016.”

    He said “the actual losses to the nation’s banking industry dropped by 24.29 percent from N3.17 billion in 2015 to N2.40 billion in 2016. Also, the level of attempted cases of frauds and forgeries declined by N0.329 billion or 11.94 percent from N2.756 billion in March 2017 to N2.427 billion in June 2017.”

    The NDIC boss also stated that “although reported cases of fraud and forgeries rose by 36.42 per cent from 12,279 cases in 2015 to 16,751 cases in 2016, the reduction in the rate of successful fraud incidences and actual losses was an indication of improved regulatory/supervisory oversight, increased vigilance by banks and the deployment of improved security architecture in the banking industry.”

    He attributed the factors breeding corruption in Nigerian banks to poor corporate governance, infractions in foreign exchange operations, cumbersome legal processes and lack of effective sanctions of offenders, amongst others.

    Umaru Ibrahim reiterated that the NDIC in conjunction with the Central Bank of Nigeria (CBN) continuously supervise the banks to ensure their strict adherence to sound corporate governance practices.

    He added that issues bordering on unethical financial practices and the resolution of conflicts between customers and their banks were being addressed by the Bankers Committee.

    He also stated that the NDIC provided capacity building programmes for the agencies in addition to seconding some NDIC Staff to the institutions to assist them in investigating financial crimes.

    He called for continued cooperation and collaboration between regulatory/supervisory authorities, the banks, the general public and the government in the fight against corruption in the banking industry.

     

  • NDIC Academy to lead Africa deposit insurance

    The Nigeria Deposit Insurance Corporation (NDIC) is set to lead the African Sub-Region in enhancing capacity building in the banking industry and the Deposit Insurance Scheme (DIS) in particular.

    The NDIC’s Managing Director/Chief Executive, Umaru Ibrahim, disclosed this during the accreditation of the NDIC Academy as a training service provider for its staff and the banking industry by the Council of the Chartered Institute of Bankers of Nigeria (CIBN) at the Bankers House, Victoria Island, Lagos.

    Ibrahim said with the NDIC Academy’s new status, it is positioned to fulfill the Corporation’s goal of serving as a center of academic excellence for capacity building on the Deposit Insurance Scheme (DIS) for countries in the sub-Saharan Africa. He added that the Corporation prides itself on establishing high standards of professionalism and competency among its staff.

  • Banks not in distress, says NDIC

    Banks not in distress, says NDIC

    The Managing Director of Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, has urged the public to ignore rumours of financial distress in some banks.

    A statement by the NDIC said that rumours were being circulated via text messages and social media to de-market those banks and destabilise depositors’ confidence in the banking system.

    The statement, signed by its spokesman, Hadi Birchi, said that the NDIC boss made the call when the Alumni Association of the National Institute (AANI) paid him a courtesy in Abuja.

    He said the NDIC had over the years played critical role in ensuring that Nigerian banks were safe and sound through effective supervision and assistance to deserving financial institutions.

    Ibrahim said the NDIC had continued to closely monitor the challenges facing the industry in order to further safeguard depositors’ interest in the banking system.

    He listed challenges affecting the banking industry      to include, poor corporate governance, insider loans and non-performing loans.

    He said that with NDIC’s strict supervision and regulation of the banking industry in collaboration with CBN, depositors should have full confidence in the safety and security of their funds in licensed banks.

  • Task Force to rearrest directors of failed banks

    Task Force to rearrest directors of failed banks

    The Task Force on the Implementation of the Failed Bank Act has decided to re-arrest directors and officers of licensed banks who committed banking malpractices had absconded for prosecution.

    A statement from the Nigeria Deposit Insurance Corporation (NDIC) said the decision to rearrest and prosecute the directors of failed banks  was because “the Task Force noted that some of those accused persons had sneaked back into the country in the hope that their prosecutions might have been terminated.”

    It is against this backdrop that the Task Force gave the notice that such accused persons would be re-arrested and prosecuted to serve as a warning to other bank offenders.

    The statement added that “the Task Force would leave no stone unturned to ensure that erring bank offenders were brought to book.”

    The Task Force had at its 38th meeting held on 13th March, 2017 reviewed two (2) cases of closed Deposit Money Banks [DMBs] involving their former Directors.  One of the closed DMBs cases currently under prosecution was FRN vs. Prince Adekunle Adeyeba & Ors where the accused persons being erstwhile directors of the closed Gulf Bank of Nigeria Plc. were facing trial over banking malpractices involving N15.1 billion of depositors funds in that closed bank. 

     The Task Force also reviewed about sixteen (16) criminal cases being prosecuted under the Failed Banks Act in which prosecution had been stalled as a result of the fact that the accused persons in those cases had jumped bail and had absconded from the country in the heat of their investigation and prosecution. The sureties that took them on bail had also disappeared. 

     It would be recalled that the Failed Banks [Recovery of Debts] and Financial Malpractices in Banks Act 1994 [Failed Banks Act] was promulgated to recover debts owed to Failed Banks which had remained outstanding as at the date the banks were closed or declared failed and to prosecute directors and officers of licensed  banks who had committed banking malpractices.  

    In July 1995, the Inspector General of Police established a special Police Unit called the Failed Banks Inquiry to assist the Nigeria Deposit Insurance Corporation and the Central Bank of Nigeria implement the criminal aspects of the Failed Banks Act   through investigation of criminal complaints referred to the Unit by the Regulatory Authorities.  

    On the 28th of December 1998, the Hon. Attorney General of the Federation and Minister of Justice constituted the Task Force on Implementation of the Failed Banks Act, [The Task Force].  

    The objective of the Task Force was to co-ordinate the different agencies involved in implementation of the criminal aspects of the Failed Banks Act in order to achieve heightened police investigation and legal officers/ private legal practitioners’ prosecution of suspects under the Failed Banks Act.  

    The members of the Task Force are made up of the Nigeria Deposit Insurance Corporation as Chairman, the  Federal Ministry of Justice represented by the Director of Public Prosecution of the Federation, the Central Bank of Nigeria, the Failed Banks Inquiry [now Financial Malpractices Investigation Unit],  the Special Fraud Unit of the Police and subsequently, the Economic and Financial Crimes Commission.

    The statement from NDIC said that “in carrying out its objective, the Task Force reviewed the police investigation of suspects and the prosecution of accused persons by state counsel and private legal practitioners issued with the Fiat of the Attorney General of the Federation under the Failed Banks Act.”

    Generally, the mandate of the Task Force was to superintend over the investigation and prosecution of failed bank cases from commencement of police investigation to ensure early arraignment of suspects before the Tribunals. 

  • NDIC to prosecute failed banks’ directors

    NDIC to prosecute failed banks’ directors

    The Nigeria Deposit Insurance Corporation (NDIC) Task Force on the Implementation of the Failed Bank Act has given notice of re-arrest for prosecution to directors and officers of licensed banks who committed banking malpractices and absconded.

    The task force had at its 38th meeting held on March 13 reviewed some pending investigations by the Police Financial Malpractices investigation Unit (FMIU) under the Failed Banks Act.

    These comprise 17 cases involving 10 closed Microfinance Banks (MFBs) in which 15 former directors of the MFBs were involved.

    A statement issued by NDIC Director of Legal Department, B. A. Taribo, said the task force reviewed two cases of closed Deposit Money Banks (DMBs)  involving their former directors.

    One of the DMBs cases currently under prosecution was FRN vs. Prince Adekunle  Adeyeba & Ors where the accused persons being erstwhile directors of the defunct Gulf Bank of  Nigeria Plc were standing trial for  banking malpractices involving N15.1 billion depositors funds in  that bank.

    The task force also reviewed the police investigation of suspects and the prosecution of accused persons by state counsel and private legal practitioners issued with the Fiat of the Hon. Attorney General of the Federation under the Failed Banks Act.

  • CBN, NDIC struggle for control of dormant accounts’ fund

    The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) tried to convince the House of Representatives Committee on Banking and Currency that they would use the proceeds of dormant accounts in commercial banks  judiciously.

    The two organisations spoke during the public hearing on a bill for an Act to Amend the Banks and other Financial Institutions Act, to among other things, establish a Deposit Fund at the CBN, for Standardisation and Management of Dormant Accounts.,

    Kofo Alada, who represented the  CBN said the amendment should give the the apex bank ‘certain latitudes’ to manage the Dormant accounts fund.

    According to him, the accrued funds into the dormant accounts would be used to finance infrastructure and also assist CBN in effectively discharging its duties  as lender of last resort to the deposit banks and other financial institutions.

    The provisions of the bill, he said, should not be restricted  to deposit banks but also extended to specialized banks that accept deposits.

    Some depositors, he said are in prison hence their accounts hence were declared dormant, and that accounts that became dormant because of liquidation were not covered by the bill.

    However, Belema Taribo, Board Secretary /Director (Legal) of the Nigerian Insurance Deposit Corporation (NDIC), said management of the dormant account should be given to the Corporation by the Green Chamber.

    According to him, the fund would be justifiably used as it will be invested in government securities as provided in the NDIC Act.

    Unclaimed funds, he said should be redrafted in the bill to include: “process of local and foreign currency, drafts or any instruments not yet presented for payment by beneficiaries or funds received from may person without sufficient details as to the rightful beneficiary, judgement debt for which judgement creditor has not claimed the amount of judgement award.”

    Taribo said despite the introduction of Treasury Single Account (TSA), there are several dormant accounts belonging to Government’s agencies and parastatals, adding that insider abuse is negatively affecting the banking industry.

    He also called for inclusion of dormant accounts of government agencies in the bill but that accounts under litigation should not be included in the pool of dormant funds.

    He urged the National Assembly  to make laws banning the accessibility to loans by bank owners or directors from their own banks.

    Chairman of the Committee Jones Onyeriere was unhappy at the lack of financial regulation from the apex bank on commercial banks.

    He said: “I’m worried to the extent that if you look at the BOFI Act amendment bill, you will agree with me that most banks create unnecessary infractions. How will you ask a bank to pay N100,000 for an infraction, that is why the bank can afford to give themselves billions of credit facility at the expense of the depositors.

    “With respect to the regulator’s, there’s nothing weighty about the consequences of not doing your job as it were because why would you have the banking supervision department and you know that the law provides that no shareholder or bank director will give credit to himself or anybody whosoever related to him or her in excess of N50,000 but you are giving billions of naira.

    “CBN, you know that no bank has the authority to give any loan whatsoever without the express approval of the CBN and you allow that to happen.

    “So the time has come to take critical look at the BOFI Act and trust me, in the next two to three months,we will come out with the amendment, enough is enough,” he said.