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Tag: NDIC

  • ‘Three million Nigerians lost N18b to MMM’

    ‘Three million Nigerians lost N18b to MMM’

    The Nigeria Deposit Insurance Corporation (NDIC) has said three million Nigerians lost N18 billion in the Ponzi scheme, popularly called Mavrodi Mundial Movement (MMM).

    Its Managing Director Alhaji Umaru Ibrahim attributed the figure to social media while speaking yesterday at the NDIC day at the 38th Kaduna International Trade Fair.

    Ibrahim, who was represented by his Deputy Director, Corporate Affairs, Hadi Suleiman, lamented that despite repeated warnings by the Central Bank of Nigeria (CBN) and the corporation, Nigerians still patronised MMM.

    He emphasised that virtual currencies, such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin and Onecoin for Internet-based transactions are not authorised by the CBN due to the risks involved.

    He warned that any person or groups of persons, who invest in the Ponzi scheme did so at their own risk.

    “The Ponzi scheme is the phenomenon of illegal fund managers, popularly called ‘Wonder Banks’, which have continued to defraud unsuspecting members of the public of their hard earned money. This phenomenon has been a source of concern because despite our repeated warnings over the years, some members of the public have continued to fall victims of their fraudulent practices.

    “We would like to reiterate the fact that these fund managers are illegal as they are neither licenced by the CBN to take deposits from members of the public nor are those who patronise them covered by the NDIC deposit insurance scheme.

    “I want to also draw the attention of some cooperative societies, which often go beyond their primary mandate by accepting contributions from members as cooperative societies are only recognised to mobilise savings from their members.”

    Advising the public on the dangers of keeping large sums of money at home or in market shops, he said there are 978 licences microfinance banks nationwide of which seven are spread across Kaduna State.

    He noted that with the advent of the cashless policy and the subsequent licensing of mobile money operators (MMOs) by the CBN, the corporation has extended deposit insurance cover to the subscribers of MMOs to the maximum limit of N500,000 per subscriber per bank through its Pass-Through Deposit Insurance Framework.

  • Three million Nigerians lost N18bn to MMM – NDIC

    The Nigerian Deposit Insurance Corporation (NDIC) has said about three million Nigerians lost N18 billion in the Phonzi scheme, popularly called Mavrodi Mundial Movement (MMM).

    The Managing Director of the Corporation, Alhaji Umaru Ibrahim, stated while speaking at the ongoing 38th Kaduna International Trade Fair on Thursday.

    Represented by the NDIC Deputy Director of Corporate Affairs, Alhaji Hadi Suleiman, Ibrahim lamented that despite repeated warnings by the Central Bank of Nigeria (CBN) and the corporation, Nigerians still patronise MMM.

    He said,”The Phonzi scheme is the phenomenon of illegal fund managers, popularly called ‘Wonder Banks’ which have continued to defraud unsuspecting members of the public of their hard earned money. This phenomenon has been a source of concern because despite our repeated warnings over the years, some members of the public have continued to fall victims of their fraudulent practices.

    “We would like to reiterate the fact that these fund managers are illegal as they are neither licences by the CBN to take deposits from members of the public nor are those who patronise them covered by the NDIC deposit insurance scheme.

    “I want to also draw the attention of some cooperative societies which often go beyond their primary mandate by accepting contributions from members as cooperative societies are only recognised to mobilise savings from their members.”

    While advising the general public on the dangers of keeping large sums of money at home or in market shops, he said there are 978 licensed microfinance banks nationwide out if which seven are spread across Kaduna State.

     

     

  • Bank directors owe N740b, says NDIC chief

    Bank directors owe N740b, says NDIC chief

    Bank directors owe commercial banks N740 billion, representing 40 per cent of N18.3 trillion non-performing loans in the banking industry, NDIC Managing Director/Chief Executive Umaru Ibrahim has said.

    He said the debt constituted insider/directors related loans and was far above regulatory threshold of five per cent for commercial banks.

    The NDIC boss raised alarm over what it called rising tide of Non Performing Loans in Nigeria’s banking industry. He spoke when members of the House of Representatives Committee on Insurance and Actuarial Matters visited the Corporation as part of its oversight function in Abuja.

    The NDIC boss stressed that “while the banking industry indicated strong fundamentals in regulatory assessment and rating, regulators were concerned about the rising tide of non performing loans (NPLs) in the banking system.

    He informed the legislators that as at December 2016, the 25 Deposit Money Banks (DMBs) had total loans portfolio of N18.53 trillion out of which N1.85 trillion or 10 per cent were NPLs.

    In other banking subsectors like the microfinance banks, (MFBs), Ibrahim noted that “there were 978 MFBs in existence as at December, 2016 with total deposits liabilities of N158 billion and total loans and advances amounting to N195 billion out of which N87.75 billion or 45 per cent were NPLs where N68.25 billion or 35 per cent constituted Insider related/Directors loans.”

    The NPLs he said “indicated a classic case of over-lending, accumulated interests charges and poor corporate governance.”

    By extension, the existing 42 primary mortgage banks (PMBs) Ibrahim said “had total deposits liabilities of N69 billion but with total loans portfolio of N94 billion, which indicated another case of over-lending, accumulated interests, poor corporate governance and high ratio of NPLs which stood at N51.7 billion or 55 per cent out of which N42.3 billion or 45 per cent were Insider related/Directors loans.”

    The resultant effects of this negative trend the NDIC boss warned “would be poor earnings and erosion of shareholders fund.

    The NDIC boss observed that this development had posed serious issues bordering on corporate governance which were capable of eroding public confidence in the banking system.

    He advocated for strict compliance with the existing code of ethics for bank directors and a review of the existing laws and regulations to proffer stiffer sanctions for Directors who exploit their positions and default in the payment of their credit facilities while still occupying directorship positions in the banks.

    He called the attention of the legislators to the delay in the approval of 2016 budget which he said “contributed to the modest execution of the budget.

    He restated the Corporations commitment to performance based budgeting system (PBBS) the essence of which is to ensure efficient allocation of resources to enable the Corporation achieve its strategic mandate.

  • NDIC’s summit on economic outlook

    One strong message that came out of the recently concluded workshop of the Financial Correspondents Association of Nigeria (FICAN) is that the worst is over as far as the current recession is concerned. This, in the views of financial system analysts, is against the background of the measures being undertaken by the federal government to get the country out of the recession. Nothing demonstrates this more than the N753 billion capital spending released between June and October 2016 – considering also that nothing near this figure had ever been spent in a full year during the last decade!

    This, at least was the consensus at the annual workshop organized and sponsored by Nigeria Deposit Insurance Corporation (NDIC) aimed at dissecting the recession ravaging the country. Aside serving the the purpose of highlighting the unique role of the financial press in managing and dissemination information to help the country navigate its way out of recession, the workshop also serves to bring the financial media and various financial regulators together with a view to understanding what measures the government is taking to see the country through the difficult, albeit winding economic recession.

    For NDIC, it is a unique platform for its corporate social responsibility, in addition to ensuring that that the Nigerian public and the relevant financial stakeholders are kept well informed and to build a rapport and synergy with the financial press.

    Indeed, NDIC has established this beautiful tradition, for many years now, of taking the annual event round the country to give it deserved national outlook. This time around Kaduna played host of the two-day event held from December 17-19, 2016. Scintillating presentations were made and digested through syndicated groups and far-reaching suggestions and recommendations proffered.

    Reflecting on the theme of this year’s workshop which is “Economic Recession and Nigerian Banking Sector: Opportunities, Challenges and Way Forward”, the Managing Director of the NDIC, Malam Umaru Ibrahim described the role of the media as very significant and great one towards the development of the nation. He challenged the media to do more in this time of recession, which he described as tough and most difficult for the country. “The media”, he said, “can achieve this through most fair, objective, well-articulated news report and analysis of the government activities on continued basis”.

    Dr. Abiodun Adedipe, one of the resource persons traced the current recession to the mid 1970s particularly the oil boom period. According to Adedipe, three significant economic issues confronted Nigeria by the turn of the 2000s: huge external debt, reaching about $36 billion; poor infrastructure and weak crude oil price, below $10/barrel at some point. The economy, then as well as now needed urgent fixing, but the purse was lean! According to Adedipe, the growth of Nigeria’s economy was robust until end-2014, averaging an annual 6.4% during 2001 to 2014. But in 2015, it grew by 2.79%, dragging the 15-year average down to 6.16%. Unfortunately, the positive growth was however, not accompanied by jobs – it was non-inclusive and exacerbated inequality, resulting in dismal development indices.

    And while the signs began to show in early 2013, Adedipe listed some of these symptoms as;  a lack of  diversification of the economy, overdependence on hydrocarbons for foreign earnings and government revenue; bloated government recurrent expenditure; a high unemployment rate (13.3% unemployment and 19.3% underemployment in Q2), dominated by youth (49.5%, up from 42.4% in Q1); a low, but stable external reserves ($24.10 bn) and high cost of doing business and high cost of living (inflation at 18.3% in October 2016).

    Another presentation by M.Y. Umar of the NDIC looked at the impact of the recession on the financial institutions.  According to Umar, the impact of recession on particularly deposit insurance system (DIS) include the following: lower saving resulting in lower premium payment which represents a threat to the survival of financial institutions; mass  loss of jobs; low investments; and rising sharp practices among banks among others.

    On the regulatory measures taken to manage the current crisis, the director, Bank Examination Department of the NDIC A.A. Adeleke listed some of them as including the unbundling of universal banking; raising of the capital adequacy; whereas the global standard is 8%, it was raised to between 10 – 16% to create default capital buffer in times of recession; stress testing – banks were subjected to liquidity test such as computation of Basel II. Both the NDIC and CBN, he said, further undertook some special proactive measures such as early intervention against warning signals; consumer education and enlightenment and preventing speculations and de-marketing of banks.

    On the role of the media, the chairman of the FICAN, Babajide Komolafe, opined that the financial media can offer its contribution to getting the nation out of the recession through reporting of opportunities available in the economy. This will help grow the economy. He held that investigative journalism can also help curb corruption, while the media can help encourage the populace to buy locally produced goods; by so doing, they will be growing the economy.  He noted that this can be done through positive reportage on the good side of made-in-Nigeria goods.

    The delicate issue of forex management under recession was discussed by CBN’s W.D. Gotring, who itemized some of the apex bank’s responses to the challenges of forex management to include closure of Retail Dutch Auction (RDA) window; adoption of interbank intervention; introduction of exclusion list (for 41 banned items); introduction of new flexible exchange policy; review of BDC operations; and introduction of forward and future’s market.

    On declining asset qualities, Owo Godwin, a financial analyst, identified some of the measures taken to improve the quality as general economic improvement through diversification; fiscal and monetary policy harmonization; boost in domestic production and value added among many others. Needless to say the effects of falling oil price on the banking sector is visible to all to see. These effects include rising non-performing loans (NPLs); dwindling liquidity; declining solvency and declining profitability among many others.

    Overall, the workshop challenged Nigerians to be ready for an inevitable recovery within the life span of the current Buhari administration. This is in view of federal government’s continuous efforts to diversify the economy; investment in agriculture, mining and infrastructure; enhancement of local manufacturing capacity; import substitution; fiscal discipline; patronage of made-in Nigeria products and services; and forex policy consistency among others.

     

    • Hassan is financial system analyst based in Abuja.
  • ‘How CBN, NDIC rendered us hopeless’

    ‘How CBN, NDIC rendered us hopeless’

    Mr. Chuks Vincent Elelegwu is 1st Vice Chairman, Association of Ex-Staff of Non-Consolidated Banks, an umbrella body championing the cause of the over 10, 000 ex-bankers who lost their jobs as a result of the consolidation policy introduced by the then Central Bank governor, Prof. Chukwuma Soludo in 2005. In this interview with Ibrahim Apekhade Yusuf he shares the agonies of his colleagues who have remained in dire straits even while still waiting for their severance packages 11 years after their exit from the system. Excerpts:

    Your association has been in the forefront of agitation for the payment of gratuities to your members. Can you bring us up to speed on what has transpired thus far?

    First of all, let me say that we had to set up the Association of Ex-Staff of Non-Consolidated Banks and registered it with the Corporate Affairs Commission (CAC) in order to pursue our case since all entreaties to the concerned authorities didn’t yield any fruits. Having said that, all I can say is that it’s so sad. It might shock you to know that life has been very unfair to many of us. I can tell you for a fact that we have been at the receiving end. Among the affected banks, we have lost over 100 members as a result of imposed poverty. Some committed suicide while others died as a result of brief illnesses which persisted because they couldn’t raise money to take proper medical care. Don’t forget, many of those affected were earning well over N150-N200, 000 monthly and suddenly became bankrupt as a result of loss of jobs. The job loss was a trigger for most of the frustrations many of us have experienced and still experiencing till date.

    The fact is that we were forced out of our jobs. It is not as if we lost our jobs as a result of redundancy or what have you. No. We lost our jobs because of the CBN policy that introduced the N25billion minimum capital base for banks. As we speak, the over 10, 000 ex-bankers whose banks couldn’t meet the requirement of the consolidation exercise are yet to get their benefits 11 years after the policy was introduced.

    Apart from those who have lost their lives, I can tell you without mincing any words that majority of us are hanging on life support of some sort. Today, a lot more are terribly sick. In fact, I just heard from a wife’s friend last week that one of our staff, Peter Ebogu developed stroke overnight. When I pressed his wife for answers, she said it was a result of the frustration his husband was facing, especially of not been able to take care of the family upkeep like paying school fees and other bills. I’m particularly sad for the fellow because he is a young man of about 45 years as such, I’m sad that he is facing such a trauma so early in life. Majority have also been forced to retire to our villages because they couldn’t cope with the rents in town and cities, especially those who didn’t erect a house before the sad episode of the job.

    But is it that the authorities concerned are saying you guys do not have a case or what?

    That is exactly my point. One question that I keep asking is this: is the CBN and the NDIC saying that we are not justified to pursue our claims or gratuities?  I can bet you that somebody like Soludo, after his stint at the CBN collected all his gratuities and other entitlements when he left the CBN, likewise Sanusi. The question then is, why are they denying us our own rights? Ordinarily, if our banks were not forced out of business by the CBN policy, we would still be in business today and most of us would be in service and looking forward to retiring with good benefits. I know this for certain because at AllStates Trust Bank we had a very robust package for our staff. The condition of service was par excellence in the industry. I recall at the time that if you retired as a staff with us you became a millionaire overnight. At least some of those who left before the consolidation exercise earned as much. That I know. But all that has remained a mirage now.

    Are you optimistic that your prayers will be answered by the court?

    Of course, we decided to take our matter to court because we think it is the appropriate place we can seek redress having explored every other avenue to no avail. And it’s our collective prayers that we will get justice at the end of it all because we believe we are fighting a just cause and the good Lord will see us through. I also recalled that the former Managing Director of the NDIC, Ganiyu Ogunleye advised the former CBN governor, Sanusi Lamido to pay us our gratuities but he chose not to comply. We’re certain that the court will prevail on the concerned authorities this time around.

  • N9.8bn entitlements: Ex-bankers sue CBN. NDIC, others

    Over 10, 000 ex-staff of banks have sued the One of those convinced that Nigerians should adopt bitcoins is the Managing Director of the Nigeria Deposit Insurance Corporation (NDIC) and the Central Bank of Nigeria (CBN) over nonpayment of their N9.8billion gratuities 1 years after they were retrenched.

    The former bankers filed a class action suit through the Registered Trustees of the Association of Ex-Staff of Non-Consolidated Banks of Nigeria and all ex-staff of eight banks not consolidated in the banks consolidation exercise at the National Industrial Court, Lagos Judicial Division.

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

    The claimants had instituted the cation 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 was owing ex-staff of the respective banks over N1.3bn just as Skye Bank and Zenith Banks were owing over N600m and N22million.

    At the inaugural hearing of the suit held at Court 2, presided over by Justice Benedict Kanyip over the weekend, the claimants’ counsel recalled that following the N25billion recapitalisation benchmark set by the apex for banks under the ‘Guidelines and Incentives on Consolidation in the Banking Industry,’ the CBN had assured that those whose employment would be jeopardised as a consequence of the exercise will be paid their due entitlements in line with industry standards and even provided with soft loans to set up their small and medium scale enterprises (SMEs).

    The claimants’ lawyer further averred that even the Act had imposed a duty upon the NDIC to ensure that acquiring banks take up the deposits and other liabilities of the acquired banks, including the terminal benefits of ex-staff.

    Regrettably, the acquiring banks implemented the act in breach by “cherry picking” and left out both the liabilities and staff benefits unattended to.

    Consequently, the claimants according to Omotilewa have had to suffer lots of privations including loss of lives, source of income to mention just a few as a result of the refusal of the defendants to redeem their promise to pay compensation due to them.

    “We’re asking for the terminal benefits of the claimants simply because it is part of their fundamental human rights which should be enforced,” he said.

    Justifying the need for the class action, Magnus Maduka, the chairman of the group, while addressing journalists said it was disheartening to note that over 100 members of the group have faced their untimely death as a result of the inhuman conditions they had been subjected to these past years.

    “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.

    Justice Kanyip while taking the claimants pleas however observed that the court was not properly served.

    Specifically, Justice Kanyip said the court had no jurisdiction to decide the case because the umbrella body under which they were filing the class action was strictly within the purview of the Corporate and Allied Matters Act (CAMA), which is clearly at variance with the act setting up the NIS Act.

    Meanwhile, the four banks represented by Messrs Olusola Oyebowale, Jenifer Aburime, C.M Omeke and Adekola Isaac Olawoye had raised preliminary objections over irregularity of the suit filed by the claimants just as they argued that it was statute-barred.

    Speaking further, Justice Kanyip said the court could only take the claimants’ pleas on a case-by-case basis and not as a group.

    He therefore moved for the adjournment to April 26th, 2017, since according to him, the face was just for mention.

  • CBN, NDIC detect ailing banks six months ahead

    CBN, NDIC detect ailing banks six months ahead

    Joint bank examination team from the Central Bank of  Nigeria (CBN)  and  Nigeria Deposit Insurance Corporation (NDIC), has the ability to detect ailing banks at least six months before it becomes public knowledge.

    NDIC Director, Bank Examination Department, Adedapo Adeleke, said both regulators have been conducting Joint Risk Based Examination of banks since 2009.

    Adeleke, who spoke  at the 2016 conference for financial journalists in Kaduna,  said  banks are as healthy as the economic environment in which they operate, saying that no lender can withstand a run from their customers.

    He stressed the need to always safeguard sensitive information on the health of banks.

    Adeleke insisted that no bank can withstand protracted macro-economic stress without some impact, adding that strong risk management practices can only delay the transmission of stress.

    He said: “There is no system that is immune to crisis. Banks are businesses and fail all over the world despite banking supervision. If you run a bank badly, it will fail. Banks are like hospitals, people will die. Supervision keeps the banks alert to ensure they do not take excessive risks”.

    According to him, it was wrong to assume that one bank would be in crisis simply because its competitor is having liquidity problems.

    “Don’t say that because Bank ‘A’ is in crisis, another is also in crisis. Banks differ in terms of balance sheet and other factors,” he added.

    The NDIC Director who spoke on the theme: ‘Refocusing Banking Supervision in Nigeria in an Era of Economic Recession’ said that the challenges being faced by the economy was due to drastic drop in prices of crude oil.

    He said that the financial sector remained a major driver of economic growth and development. It occupies a central position in the economic development process of any economy it assists in promoting accelerated economic growth through the process of financial intermediation.

    “For that reasons, strategic elements of Supervisory Approaches and Tools are deliberately designed to be forward looking to reduce the impact of unfavourable economic cycle on the health of individual bank and the financial system,” he said.

  • NDIC to Nigerians: stay away from ‘wonder banks’

    NDIC to Nigerians: stay away from ‘wonder banks’

    • MMM moves to Kenya

    The Nigeria Deposit Insurance Corporation (NDIC) has warned Nigerians, especially those investing in “wonder banks”, to desist from such investments.

    The Deposit Money Banks’ insurer gave the warning in reaction to the development on the Ponzi Scheme company, Mavrodi Mondial Movement (MMM), which has frozen its operation in Nigeria.

    It said such firms are not licensed by the Central Bank of Nigeria (CBN) to operate as financial institutions.

    NDIC Managing Director Umaru Ibrahim, who gave the warning at the annual workshop for Business Editors and Finance Correspondents Association of Nigeria (FICAN) in Kaduna, at the weekend, said MMM is neither guaranteed nor regulated by any authority in Nigeria, adding that anyone investing in it should be ready to bear the risk whenever it occurs.

    Ibrahim, who described MMM as fraudulent and not in tandem with any business model, said regulatory authorities should not be expected to regulate such a non virtual organisation.

    He said the MMM had moved to Kenya after freezing its account in Nigeria, urging Nigerians to patronise only licensed financial institutions.

    He urged banks to invest in innovation as a way of cushioning effects of the economic recession currently rocking the nation.

    He said the theme of the workshop: Economic recession and the Nigerian banking: Opportunities, challenges and the way forward, was timely and could not have come at a better time than now that Nigeria is currently facing recession and equally looking for a way out.

    “Now as we know, we are living in what is referred to as vocal world, meaning vulnerable, uncertain, complex and unpredictable world, and we are experiencing this in one way or the other, as individuals and corporate entities, therefore it is obvious that for any individual, any organisation to survive, one has to be creative, one has to be innovative to survive this very turbulent moment.

    “Banks, as we know, are facing liquidity issues, foreign exchange issues and unemployment. There is high expectations from depositors for quality service and complaints against unreasonable charges, as well as high expectation from investors even in difficult times,” he said

    On MMM, NDIC Director, Special Insured Department, J. J. Etopidiok, said: “As we speak MMM is not a creation of Nigerian environment. In 1994, it entered Russia where they were able to defraud about 11 million people and people lost about $1.5 billion, and 50 people committed suicide.  When the Russian government was about to arrest them, they moved to China committing the same havoc. Again, when they wanted to arrest them, they also disappeared to South Africa.

    They resurfaced in Nigeria sometime in October this year. As at the last check, the enrollment in Nigeria was about three million.

    While speaking on the theme: ‘Effect of falling oil prices on the banking sector Performance in Nigeria: microfinance banks and primary mortgage institutions’ perspective, Etopidiok said the regulator has increased strategies to ensure the financial sector remains strong.

    He said the MfBs/PMB segment holds great potential for economic development, adding that  the Corporation has extended insurance coverage for PMBs to N500,000 per depositor from N200,000.

    The NDIC has also instituted insurance cover for agency banking, online, mobile money to the tune of N500,000, in efforts to deepen payment system and institute confidence in alternative payment channels.

  • NDIC urges depositors in dead banks to file in claims for payment

    NDIC urges depositors in dead banks to file in claims for payment

    The Managing Director of Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umar Ibrahim has called on depositors who lost their money in liquidated banks to file their claims through the zonal offices of the corporation or any of the 10 banks appointed for the payment across the nation.

    Alhaji Ibrahim, who spoke through the Director of Assets Management, Alhaji Bashir Umar at NDIC Special Day during the ongoing 37th Kano International Trade Fair named the appointed banks to include First Bank of Nigeria, United Bank for Africa, Zenith Bank, Wema Bank, Heritage Bank, Union Bank, Fidelity Bank, Skye Bank, Unity Bank and Diamond Bank.

    The NDIC boss, however, lamented the activities of ‘Wonder Banks,’ just as he warned members of the public to be wary and desist from patronising banks which he described as fraudulent.

    “I wish to sound a note of caution to discerning members of the public to beware and avoid any contact with these fraudsters as many unsuspecting public are still falling victims to the mouth-watering offers of hot returns. Members of the public are therefore advised to patronize insured banking institutions that display the NDIC stickers in their banking halls or entrances.

    He added that NDIC in collaboration with Bank Customers Association of Nigeria (BCAN) recently organised a town hall meeting in Kano in recognition of the importance of the public awareness in the advocacy and engagement with all stakeholders for purpose of financial education and the role of NDIC in bank customer’s protection.

    Speaking on the roles of NDIC, he described the corporation as a Federal Government agency with the primary aim of protecting small depositors who have been N1.0 and up to N500, 000 in Deposit Money Banks (DMB) in the event of bank failure.

  • NDIC raises insurance cover for PMBs by 150%

    NDIC raises insurance cover for PMBs by 150%

    •Advises ‘dead banks’ depositors to file for claims 

    The Nigeria Deposit Insurance Corporation (NDIC) has increased the deposit insurance coverage for Primary Mortgage Banks (PMBs) by 150 per cent to N500,000.

    The coverage figure, previously at N200,000, was raised to N500,000 to stimulate the confidence and patronage of mortgage customers.

    NDIC Managing Director, Umaru Ibrahim who disclosed this in Lagos, said the corporation will continue to review its deposit insurance coverage for depositors of PMBs in the event of failure.

    “The current coverage level represents an increase of 150 per cent over the earlier level of N200,000. Thus, the gap of the coverage between the commercial banks and PMBs is now bridged with the envisaged increase in patronage of PMBs,” he said.

    Speaking at the 2016 sensitisation workshop for PMBs’ operators, he said the corporation’s records showed that 15 out of 42 PMBs are yet to meet their premium payment obligations to the corporation. He urged the affected operators to promptly pay their premium to the corporation in line with regulatory guidelines.

    Meanwhile, the NDIC yesterday in Kano urged depositors who lost their money in liquidated banks to file for claims through the zonal offices of the corporation or any of the 10 banks appointed for the payment across the nation.

    Ibrahim who spoke through the Director, Assets Management at NDIC, Alhaji Bashir Umar at NDIC Special Day at the ongoing 37th Kano International Trade Fair named the appointed banks to include First Bank of Nigeria, United Bank for Africa, Zenith Bank, Wema Bank, Heritage Bank, Union Bank, Fidelity Bank, Skye Bank, Unity Bank and Diamond Bank.

    He lamented the activities of ‘Wonder Banks,’ just as he warned members of the public to be wary and desist from patronising banks which he described as fraudulent.

    “I wish to sound a note of caution to discerning members of the public to beware and avoid any contact with these fraudsters as many unsuspecting public are still falling victims to the mouth-watering offers of quick returns. Members of the public are therefore advised to patronise insured banking institutions that display NDIC stickers in their banking halls or entrances,” Ibrahim said.

    He said the corporation has the capacity to sustain its efforts in ensuring that insured institutions are put on the part of sustainable growth and development, adding that it is an exercise that would depend largely of premium contribution.

    The corporation, he said, has also deployed the Differential Premium Assessment System  (DPAS) in pricing the deposit premium of PMBs.

    He said the DPAS centres on strong Enterprise Risk Management Framework (ERMF) and classifies banks into various risk buckets and apply different premium rates depending on the level of risk involved.

    He said the DPAS will mitigate insurable risks for PMBs as well as encourage effective enterprise risk management.

    According to him, the ERMF would include sound strategic planning and transformative business model and addresses the issue of moral hazard which guarantees caution and avoidance of excessive risk taking in running a PMB.

    Ibrahim said: “To the operators in particular, the risk-based premium system allows the institution to pay much less premium than would have been the case, had the alternative, flat rate system had been adopted.

    The NDIC boss said the corporation is the sole agency empowered to guarantee depositors’ funds in the deposit-taking financial institutions.