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  • Enterprise: Will Heritage beat October 13 deadline?

    Enterprise: Will Heritage beat October 13 deadline?

    The sale of Enterprise Bank Limited entered the final stage when the Asset Management Corporation of Nigeria (AMCON) announced Heritage Bank Limited and Fidelity Bank Plc as preferred and reserved bidders respectively. Although Heritage Bank has paid the initial 20 per cent part payment and still has up till October 13 to make the final payment or Fidelity Bank steps in. COLLINS NWEZE reports on the unfolding opportunities and intrigues that greet the sale.

    The race for Enterprise Bank sale has been on for over a year. On Thursday, September 11, the Asset Management Corporation of Nigeria (AMCON) announced HBCL Investment Services Limited (HISL), sponsored by Heritage Banking Company Limited, as the preferred bidder for Enterprise Bank.

    The firm has up till October 13 to balance about N44.8 billion, representing 80 per cent of the N56 billion bid price.

    While the clock ticks for Heritage to pay up, Fidelity Bank Plc, the reserved bidder is patiently waiting to step in, should the payment arrangement fail.

    But Heritage Bank CEO, Ifie Sekibo assured stakeholders that the lender will beat the deadline. He is already planning the post-Enterprise Bank era, outlining strategies that would transform the new entity to a mega bank.

    He confirmed that the lender has already paid the 20 per cent or N11.2 billion of the N56 billion bid prices before the Share Purchase Agreement (SPA) was signed in Abuja about fortnight ago.

    The Heritage Bank boss confirmed that the bank had already paid the initial 20 per cent of the total bid price for Enterprise Bank pointing out that efforts were already in place to ensure the payment of the final 80 per cent within the time frame stipulated by AMCON.

    He said the lender is already working on the process it believes, will finally culminate in the acquisition of Enterprise Bank Limited to further drive its time-proven potentials of creating, preserving and transferring wealth among its teeming customers.

    “In line with AMCON’s requirements for the acquisition of Enterprise Bank Limited, HBCL Investment Services Limited (HISL) which is the special purpose vehicle sponsored by Heritage Bank Limited to bid for Enterprise Bank on Friday last week signed the Share Purchase Agreement (SPA).

    I am also aware that HISL has paid the initial 20 per cent as specified in the terms of the agreement. Efforts are ongoing to ensure that the balance 80 per cent is also paid in line with the terms, conditions and time frame specified by AMCON. This major step towards the acquisition of Enterprise Bank by HISL and by extension, Heritage Bank, fills us with great excitement. With this take over process going on smoothly, we are sure a more energized bank with improved capacity to create, preserve and transfer wealth will soon emerge,” he assured.

    Managing Director, CRC Credit Bureau, Tunde Popoola said the acquisition, when completed, would improve competition in the banking sector.

    He explained that in acquisition of this nature, there are different things that are involved including the winner’s ability to pay. He expressed optimism that Heritage will be able to muster the required fund and pay before the deadline expires.

    “Don’t forget that they bided on their own. They provided the value of the bid. Where you are bidding and you are providing amount you want to pay, it then means you have a way of sourcing for that fund. Otherwise, it does not make sense to bid for an amount you will not be able to pay,” he said.

    Popoola said the process has been transparent and winners know the timeline they will be given to pay. He however said the bank must pay without depleting its capital adequacy. “And as a banking institution, they must have the required money without impairing their capital adequacy. If they do not have the means to pay, and the time expires, there is already a reserved bidder,” he said.

    He said should Heritage fail to pay, the right to acquire Enterprise Bank will then go automatically to Fidelity Bank. “If they fail to pay, that goes back to the second bidder who will then pay its bid price. Whichever way it goes, I believe Enterprise Bank will be better for it and the economy will also be better for it because you will see a bank that will run fully with all the potentials,” he said.

     

    AMCON factor

    The AMCON and Heritage Bank Limited SPA will enable the latter acquire the entire issued and fully paid up ordinary shares of Enterprise Bank Limited.

    AMCON had in a statement endorsed by its Head, Corporate Communication, Kayode Lambo announced HBCL Investment Services Limited (HISL), sponsored by Heritage Banking Company Limited (Heritage Bank), as preferred bidder while Fidelity Bank Plc was named reserve bidder for the acquisition of the bridged lender.

    The AMCON spokesman said the bid process started with interest shown by 24 parties cutting across local and international boundaries. The emergence of HISL and Fidelity Bank as preferred and reserve bidders respectively, he said, resulted from a rigorous and competitive bidding process, which was coordinated for AMCON by Citigroup Global Markets Limited, Vetiva Capital Management Limited (Financial Advisers) and G. Elias & Co. (Legal Advisers).

     

    The controversy

    The AMCON has consistently defended the transparency of the deal. In July, it refuted newspaper report alleging that it interfered with the bid process to favour a particular local bank.

    In a statement, Lambo said the bid process leading to the sale of Enterprise Bank has not even reached the stage where any result would be sent to the Central Bank of Nigeria (CBN).

    It said this suspicion was aggravated when AMCON suddenly changed one of the rules for the sale of the Bank shortly after the final bids were submitted. This, according to the report, prompted the CBN Governor to order AMCON to conduct fresh final bids, based on some specific criteria that would be used to adjudge the bids submitted by the five contesting institutions.

    The apex bank is alleged to have seen the result of the final bid submitted by AMCON as inconclusive, with attempt to focus on criteria that would influence the outcome in favour of the particular bank.

    But in a reaction, AMCON said it wanted the public to know that after the advisers (Messrs Citibank and Vetiva) who it employed have concluded their work, AMCON’s management and board will consider the result before the approved buyers are officially sent to the CBN.

    “It is therefore premature for the report to say that AMCON interfered with the process, as the process is still on-going and no names have yet been officially sent to the AMCON board for consideration,” the statement said.

    “AMCON has not interfered in any way in the process that is still entirely in the hands of the advisers. When the advisers present their final report, which we expect within the next two weeks, regulatory approval will be required and sought,” the statement said.

     

    Rules of engagement

    AMCON commenced the sale of Enterprise Bank on September 22nd, last year when it formally invited interested buyers to express interests in acquiring its 100 per cent stake in the bank.

    The audited financial statement of the Enterprise Bank Group as at 31 December 2012, show that the Group’s Total Assets stood at N263.5 billion, Customer Deposits at N208.4 billion and Total Equity at N31.9 billion

    The invitation by AMOCN prompted interests from some Nigerian banks namely Diamond Bank Plc, Fidelity Bank Plc, Sterling Bank Plc, Stanbic IBTC Bank Plc, Standard Chartered Bank, Skye Bank, Heritage Bank Limited and other investment groups.

    Others include investors like Taunus Holdings, Sahara Energy, Obat Oil and about 12 private equity firms backed by experienced bankers as well as financial and investment analysts.

    AMCON said interested buyers should indicate their interest by submitting an Expression of Interest (EoI) with information such as the “description of acquiring entity or vehicle with evidence of registration or incorporation; ownership of the acquiring entity or vehicle; identifying all shareholders with a five per cent or more stake; strategic rationale for the acquisition of Enterprise Bank; relevant financial services industry experience and/or demonstrable evidence of ability to manage a bank of this nature.”

    Also, interested buyers were requested to submit evidence of financing capacity, while a consortium should “provide evidence of alliance/partnership/joint venture between members in the consortium, clearly indicating the lead member authorised to submit the EoIs.”

    The corporation had added: “Upon receipt and evaluation of the EoI, a shortlist of buyers, who in AMCON’s view are deemed to be fit and suitable from a regulatory perspective (amongst other things), will be prepared and will proceed to the first phase of the transaction.

    Analysts advised that the potential investor in the bank should have a disciplined board and management that adhere to sound corporate governance principles.

    Former Head of Research and Corporate Development, Consolidated Discounts Limited (CDL), Mr. Jimi Ogbobine, argued that tier two banks will benefit more by buying Enterprise Bank. He said the bank’s branch network remains a major strength that ambitious lenders can tap into.

    He explained that the legacy bad loans of Enterprise Bank have been bought by AMCON, adding that overall, the offer looks attractive.

    The Managing Director/Chief Executive Officer of Enterprise Bank Limited, Ahmed Kuru, said he was happy leaving behind, a better Enterprise Bank and a happier workforce. He added that he was convinced that customers will have the best deal at the conclusion of the process. “I am convinced our customers expect the best deal at the end of the day. So their expectation should be high,” he said.

    He explained that right from the beginning when he was appointed, it was very clear to him that AMCON, at certain point in time will divest from the bank.

     

    Bridged banks

    Enterprise Bank is wholly owned by AMCON. Other bridged banks owned by AMCON are Keystone and Mainstreet banks. The corporation had acquired the lenders in August 2011, after the intervention by the Nigeria Deposit Insurance Corporation (NDIC) and the Central Bank of Nigeria (CBN). Enterprise Bank was created from the ashes of the defunct Spring Bank, while Keystone Bank and Mainstreet Bank were created from the defunct Bank PHB and Afribank respectively.

    As part of efforts to divest its shareholdings in the three banks by 2014, starting with Enterprise Bank, AMCON had appointed Citigroup Global Markets Limited (Citi) and Vetiva Capital Management Limited as Financial Advisers, as well as G. Elias & Company as Legal Adviser to the transaction.

    Enterprise Bank commenced operation in August, 2011, as a full-service commercial bank with a national banking license. The bank operates via a sizeable distribution network of over 160 branches spread across major markets and commercial centres in Nigeria, and with over 177 automated teller machines (ATMs), 57 Cash Centres and 2,000 point of sales (PoS) terminals.

     

  • NDIC mulls no premium, no cover policy for banks

    NDIC mulls no premium, no cover policy for banks

    The Nigeria Deposit Insurance Corporation (NDIC) has said that it is working on achieving a no policy, no cover policy for the Nigerian financial sector.

    NDIC Managing Director, Umaru Ibrahim said the corporation, HAS included in the ongoing amendments to its Act, a section that will empower it to cover only institutions that have paid their premium.

    He said the implementation of such act, will enable it plug some loopholes and ginger the insured firms to pay their premium promptly.

    He said the Corporation is also working on establishing a ‘Resolution Fund’ that will enable it create more buffers to handle cases, should a bank fail.

    The NDIC covers all deposit taking financial institution licenced by the Central Bank of Nigeria (CBN). These include Deposit Money Banks, Microfinance Banks, Primary Mortgage Banks (PMBs) and Non-Interest Bank. The NDIC currently provides deposit insurance cover to 24 commercial banks, 880 microfinance banks, 77 primary mortgage banks and one Non-Interest Bank.

    Ibrahim explained that NDIC collaborates with the CBN for effective banking supervision, adding that such would protect depositors, foster monetary stability and promote effective and efficient payment system, as well as ensure innovation and competition in the subsector.

    He said the Corporation has for several years, carried out these tasks which have resulted in the   reduction in examination cycles of banks and led to minimal disruptions in the payment system.

    He advised PMBs to adhere to recommended corporate governance practices, based on effective and sustainable risk management practices as instituted by the regulatory authorities.

    “Weak corporate governance and risk management frameworks could result in risky behaviours by PMBs, which could in turn result in the creation of huge toxic assets and ultimately put insured deposits at risk.”

    He lamented that the supervisory authorities were deeply concerned about the build-up of toxic assets of micro finance banks, which stood at about 45.70 per cent as against the prescribed maximum of five per cent, while hinting that the corporation’s attention is now being focused on both Micro Finance Bank and PMB sub-sectors so as to address the emerging challenges.

    He, however, advised that PMBs should be interested in enhanced risk management standards because some mortgage portfolios are on a predominantly variable rate and therefore highly sensitive to interest rate fluctuations.

    He said: “For instance, an increase in interest rate could make mortgage repayment difficult and result in default which may give rise to toxic assets. Furthermore, new mortgages could become less attractive for consumers’ due assets.

    PMBs should be able to assess a consumer’s ability to continue with mortgage repayments in the case of an interest rate rise. A lack of thorough and effective assessments could pose a major risk for many PMBs.”

    Ibrahim stated that the corporation and the CBN were making concerted efforts to ensure that risk management issues in the financial system were continuously addressed via rapidly developing capacity in the implementation of Basel II and III.

    The maximum deposit insurance coverage was increased from its set level of N50,000 at inception to N200,000 in 2006. In 2010, it was further raised to N500,000 for commercial banks.

  • CBN, NDIC urged to address customer abuse

    The Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC) and other regulatory and supervisory authorities have been urged to take seriously the rising cases of customer abuse in the financial services sector.

    The Consumer Protection Unit of the CBN is to ensure that banks’ customers enjoy not only quality services but also protection from excessive charges and outright loss of funds through fraud and forgery.

    President, Bank Customers Association of Nigeria (BCAN), Dr. ‘Uju Ogubunka, called for a functional helpdesk at banks’ headquarters where consumer complaints could be lodged. He also urged the regulators to review existing consumer complaints management framework in the sector to protect the interest of customers.

    Ogubunka, who said this in a communiqué issued at the group’s maiden bank customers summit in Lagos, said such review would help lenders in achieving quick resolution of complaints.

    Ogubunka, who was Registrar, Chartered Institute of Bankers of Nigeria (CIBN), said the regulators should also support BCAN in the propagation of its programmes which are critical in deepening financial awareness in the country and  achieving greater penetration of financial education.

    He said lenders should also consider extending their consumer complaints desks to zonal and branch offices to facilitate quicker resolution of cases.

    He said participants recognised the inter-dependence of the operators, regulators and bank customers in creating a sound, stable, sustainable and resilient financial system.  The participants also agreed that a lot has happened in the banking industry that has made the formation of BCAN imperative.

    The ex-registrar also wants regulators to facilitate the realisation of CBN’s financial literacy/inclusion objective, as well as inculcate appropriate banking habits and culture among the populace.

    He said BCAN should also rally bank customers and consumers of banking and financial services for the promotion and protection of their interest in the face of daunting challenges against them.

    According to him, BCAN also agreed that banking should be conducted based on acceptable values and best practices, stressing that BCAN will intensify efforts at fostering mutual understanding, trust and confidence between banks and their customers through customer education. He said the step will strengthen and ensure the realisation of CBN’s financial literacy/inclusion and other programmes.

    He said the BCN should also organise awareness programmes in the areas of Guide to Bank Charges, Financial Literacy and Inclusion as well as Banking Policies, Regulations, Products/Services for the benefit of consumers in particular and stakeholders in general.

    The group should also collaborate and partner with organisations and individuals who share its vision and objectives in order to be able to extend its services to the nooks and crannies of the country for positive multiplier effect.

    It also should create sustainable platform for the provision of advisory and counselling services in banking and finance to its members and the interested public in order to deepen their knowledge and ability to make the right financial decisions and choices.

    The group also pledged to work closely with the regulatory and supervisory authorities to ensure that banks are held accountable for any unethical, unprofessional and risky products, services and practices they introduce into the financial system and to customers/consumers.

     

  • Nwaogu: There is no zoning in Abia

    Nwaogu: There is no zoning in Abia

    Senator Nkechi Nwaogu will complete her second term in the Senate next year. Between 2003 and 2007, she was a member of the House of Representatives. In this interview with GBADE OGUNWALE, the Abia State governorship aspirant on the platform of the Peoples Democratic Party (PDP) submits that zoning with outlaw merit and enthrone mediocrity.

    Why do you want to veer off the legislative terrain  where you have become an authority for the Abia State governorship tussle?

    I think I can do it better as a woman. I know a woman has never been a state governor in Nigeria, but it is a shame that we are wasting over 50 per cent of human resources, who are of the female gender; they are not bereft of ideas. You can’t continue to make them hand clappers and uniform wearers. We are eight women in the Senate today. All of us are chairmen of various committees where men are more in number. This is a place where we have ex-governors and other Nigerians of achievements. Yet, these women have performed their roles creditably well. We have been able to comport ourselves and  do things orderly. I am convinced that if there is a level playing ground, the people of Abia would want a positive change. They would want to try a woman. If Barack Obama had not presented himself to the Americans, nobody would have believed that a black person can become the President of the United States in the 21st century. I am offering myself for  service as governor of Abia State. I have reeled out my programme to my people. All I am asking for is a level playing ground.

    How are you going to scale through the hurdle of the zoning arrangement?

    Zoning has never happened in Abia before. Our  founding fathers saw the goodness in Abia and drew what we call the Abia Chapter of Equity that recognised the old Bende and old Aba zone or the Ukwa Ngwa as it was called. For governorship in Abia, it is two major political blocs. In Abia State, what we have that determines where somebody comes from for governorship purpose is either you are from old Bende, comprising of eight local governments, or Ukwa Ngwa. There was never a time in the history of Abia that we adherred to a zoning formula for governorship purposes. Since Abia was created in 1991, people have campaigned and vied for governorship from every part of the state. In 1999, under the PDP, Orji Uzor Kalu  ran, I. C Madubuike ran, Dan Nwankwo  from Obingwa in Abia South ran, Dr. Amuta from Isiala Ngwa South ran, Dr. Nduadibe from Isiala Ngwa North ran, Chukwu Nwachukwu from Isiala Ngwa South ran, Lambert Nmecha of blessed memory ran for governorship across the state. But at the end of the day, Orji Uzor Kalu emerged as the candidate of the PDP. In the same 1999, for the All Peoples Party (APP) it was Vincent Ogbulafor that emerged. I ran for governorship in 1999 under the platform of the APP. So many people across all the senatorial districts ran and at the end of the day, it was Vincent Ogbulafor that emerged as the governorship candidate. Orji Uzor Kalu won the election and the rest is history. From 1999 to 2007 and even in 2003, when Orji Uzor Kalu was running for a second term, even our brother, Senator Eyinnaya Abaribe ran under ANPP from Abia South and was the candidate for Abia South. We have never done zoning in Abia State. It is alien to our state, it is divisive and   destructive. So, that is what has been unsettling the political the climate in Abia State. It is very abysmal to say that we the Abangwa people are divided. Let it be on record that Iiala Ngwa is the ancestral home of the  Ngwa people. So, why will anybody say that Isiala Ngwa North and South and Osisioma Ngwa will not be included. Just because they don’t want certain people to run for governorship. This so-called zoning excludes three local government areas in Ngwa. But, unfortunately, Isiala Ngwa is the father of Ngwa; it’s the ancestral home of Ngwa and you cannot exclude people from that axis like me. Isiala Ngwa people have not even been deputy governors before. For instance, in Obi Ngwa in Abia South, they have been professional deputies; you have Abaribe, Chris Akoma and another person, all have served as deputies. They are all from one local government from 1999 to date. There have been four deputy governors under the platform of the PDP, all coming from Abia South. In Isiala Ngwa as a whole, nobody has even served as Secretary to the government, let alone a deputy governor. What is the import of this call for zoning?

    They would up dividing Ukwa Ngwa people. We are one indivisible political bloc. We fought collectively for it. So, the position should be given to us as a people. We are in the majority in Abia State. Nine local governments made up of about 2. 3 million people. How can you now say that the next governorship should be restricted to half of the Ngwa people.

    So, you think the emphasis should be the capacity to move the state to the next level. Do you have the requisite experience for the job?

    For the Abia people to have given me the opportunity to serve them in the Senate for three times is not a mean feat. I think I am equipped for the job. I know the terrain very well. I am fully mature right now and I have the blessing and direction of God right now. The time is now, with the 12 years I have spent in the National Assembly gathering legislative experience, establishing national and international outreach.

    What do you have to show for the 12 years you have spent  as a federal lawmaker?

    During that period, I was the first and it is still on record that between 2003, 2004 to 2007, I provided mobility as a means of income generation for my constituency on a very affordable basis. I was also instrumental to siting one or two health centres within my area. As a woman and as someone on ground, I realised that the health centres then were very sparsely located. Consequently, mothers or child-bearing mothers in the community were finding it difficult to get to conventional health care centres or hospitals. These are the achievements that are still on record. As a member of the Senate, I brought about certain changes in law which is our primary function as legislators. I sponsored a law which today has brought about relief to the financial sector, that is today the establishment of the Asset Management Company (AMCON). AMCON was a novelty in Nigeria. It was and is still a revolutionary vehicle that is intended to ensure that banks are not saddled with toxic financial loans. When I say toxic loans, I mean loans that are no longer serviceable. The owners of the loans are no longer servicing them, they are no longer repaying them. So the banks are carrying paper profits and with that paper profits, it is deemed that the banks are no longer solvent. With the advent of AMCON, banks today are good, I mean solid. You can put your money there and go to sleep. I have my name on it. Also, I was the co-sponsor of the amendment of the Nigerian Deposit  Insurance Corporation (NDIC).

  • NERFUND: Govt may extend bidder exit date for interim managers

    NERFUND: Govt may extend bidder exit date for interim managers

    The Ministry of Finance (MoF) may extend October deadline for the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) to hands off the management of the National Economic Reconstruction Fund (NERFUND), The Nation has learnt.

    The extension is to enable the  interim management team complete NERFUND resuscitation.

    The team was seconded last October 14 to overhaul NERFUND following a N5.7 billion loss. Its tenure is expected to end on October 13.

    The team is headed by Muhammad Gidado Kollere of the NDIC as Managing Director/CEO; Ihua Elenwor of the CBN is the Executive Director, Operations.

    The managers are to recover outstanding loans and reconciliate all accounts with correspondent banks. They are also expected to render quarterly reports to NERFUND’s board, headed by the Permanent Secretary, MoF.

    An insider at NERFUND said the agency’s receivership is for one year, after which a substantive Managing Director will be appointed.

    The source said there is intense lobbying for the job.

    “You see, these managers from the CBN and NDIC may not want to quit when their tenure expires in October. They are more professional than the past managers of the Fund. They are also likely to seek extension of their tenure,” the source said.

    The source said the CBN/NDIC team has been able to restructure some of the ‘political loans’ that led the Fund into incurring losses. “Majority of the political loans that dented the balance sheet of the FUND has been restructured, and collateral secured,” the source said.

    The source also faulted the N5.7 billion loss claim by the government, saying the total amount NERFUND obtained from government since inception is not up to that amount. The Fund received N2.8 billion in 2010, and $141 million from the Africa Development Bank (AfDB) at an exchange rate of N9.9 to a dollar, in 1991.

    NERFUND also got another N350 million loan from the Federal Government. The source said the cumulative funds, made available to NERFUND till date, are below N4 billion.

    The source said there are also plans to restructure the operations of the Fund.

    This may necessitate the merger of NERFUND with the Bank of Industry (BoI) to deepen credit access to small and medium enterprises (SMEs).

    NERFUND was established by Decree No. 2 of 1989 to provide medium to long-term loans to participating banks (PBs) for on-lending to small medium enterprises (SMEs) for the promotion and acceleration of productive activities in such enterprises.

    The government took over the Fund following President Goodluck Jonathan’s approval of the recommendations of the CBN and NDIC Joint Special Examination report on its books. It claimed that the capital invested in the institution by the Ministry of Finance had been eroded with the gross losses.

    The Fund, it was learnt, has not been able to service loans taken for on-lending from the AfDB, the MoF and other sources. The source said the agency’s last governing board was dissolved in 1993, adding that it was being run by an Interim Management Committee headed by Permanent Secretary, MoF before the CBN/NDIC team came on board.

    The source said the firm has over time canvassed for reconstitution of its corporate governance board, recapitalisation and total restructuring. There were also previous plans to merge it with other Development Finance Institutions (DFIDs), which also failed.

    Conditions set for accessing the NERFUND Micro Enterprises Credit Scheme entail that prospecting businesses must be engaged in manufacturing, mining, quarrying, agro-allied, industrial support services, equipment leasing and other ancillary services.

    Besides, the enterprise should be wholly Nigerian owned and must source its raw materials for the project locally but could source plant and machinery either locally or from abroad. The projects to be financed must be financially and economically viable, and should have positive impact especially in employment creation in the operating environment.

    According to NERFUND statutes, the expected project could be a start-up, expansion, rehabilitation or diversification of existing business while the beneficiaries are expected to own 10 per cent equity of the proposed business. The prospective beneficiary must have a limited liability company or registered enterprise and can only access between N100,000 and N5 million.

  • NDIC denies seeking more power

    The Nigeria Deposit Insurance Corporation (NDIC) has denied some reports that it is seeking powers to liquidate insurance companies.

    In a statement, the corporation explained that as a deposit insurer and liquidator of insured deposit taking financial institutions, the liquidation of insurance companies does not fall under its purview.

    The corporation said its proposed amendments bill which is before the National Assembly does not seek powers to liquidate insurance companies or terminate the insurance firm’s licenses as erroneously published in the national dailies.

  • NDIC clarifies position on liquidation of insurance firms

    NDIC clarifies position on liquidation of insurance firms

    THE Nigeria Deposit Insurance Corporation (NDIC) has denied media reports that the corporation was seeking powers to liquidate insurance companies and (or) terminate the insurance firms’ licences.

    A statement from the NDIC, which was signed by Hadi S. Birchi, Head, Communication and Public Affairs, said the erroneous publications were sequel to the public hearing held on Tuesday, 8th July, 2014 by the House of Representatives Committee on Banking and Currency.

    Birchi noted that “as a deposit insurer and liquidator of insured deposit taking financial institutions, the liquidation of insurance companies does not fall under the purview of the corporation.”

    The amendments bill which is before the National Assembly, Birchi explained, “does not seek for powers to liquidate insurance companies or terminate the insurance firm’s licenses.”

    Emerging challenges after the series of banking crises, as well as the experience garnered in the operation of deposit insurance in Nigeria in the past 25 years, the NDIC said “have necessitated the need for a further review of the 2006 Act in order to empower the Corporation to address the emerging challenges.  The proposed amendments are therefore to enable the corporation discharge its mandates effectively and efficiently.”

    Accordingly, some of the amendments and or new provisions being proposed are prompt payment of insured deposits following failure of an insured institution by reducing time of reimbursement (payment to depositors) from 90 days to 60 days; powers to deal with parties at fault i.e. Directors and officers who caused the failure of an insured institution.

    Others include the power to reimburse insured depositors notwithstanding pending court suits; prevention of execution of judgment against the assets of the corporation (as body corporate) for a liability of a failed insured institution and limitation of court orders aimed at preventing the corporation from carrying out its statutory functions of deposit protection.

    NDIC, the statement added is also asking for amendments to enhancing corporate governance practices in the corporation; increase funding for the corporation to be able to carry out its core mandate of depositor protection; and to enhance its debt recovery efforts.

     

  • CJ: NDIC, judiciary cooperation paying off

    The cooperation between the Nigeria Deposit Insurance  Corporation (NDIC) and the judiciary is yielding result, Chief Judge of the Federal High Court, Justice Ibrahim Auta has said.

    The exclusive designation of judges to handle NDIC cases has resulted in timely dispensation of judgments and sustained the competence and specialisation of designated courts, he said.

    Speaking at a sensitisation seminar for Federal High Court Judges organised by NDIC in Abuja, Justice Auta said judges had been exclusively designated to handle NDIC cases.

    He pointed out the seminar had enlightened the bench on the mandate and activities of the corporation which, according to him, had resulted to more proactive and accurate adjudication of insolvency disputes.

    Also speaking during the conference, NDIC Chief Executive Officer, Umaru Ibrahim said the corporation will continue to collaborate with the judiciary in the discharge of its mandate to enhance financial system stability, , has said.

    In his keynote address with the theme: “The challenge to deposit insurance law and practice”, Ibrahim said NDIC observed that the public had a wrong perception of its statutory mandate.

    Hence, he said, time and valuable resources were invested to reverse the trend through effective and continuous public awareness and close collaboration with key stakeholders.

    Ibrahim recalled the corporation’s sponsorship of a similar seminar last year where about 53 judges of the Federal High Court participated.

    He said the corporation was not oblivious of the fact that some judges that benefited from the last seminar had been elevated to the Court of Appeal or had retired and new ones appointed.

    He said the second run of the seminar was organised by the corporation to consolidate on the gains of the previous edition and to strengthen its relationship with the courts in the interest of bank depositors and Nigeria’s financial system.

    Justice Auta added that the exclusive designation of judges to handle the NDIC cases had resulted in timely dispensation of judgments and sustained the competence and specialisation of designated courts.

  • NDIC CEO visits new CBN Governor

    NDIC CEO visits new CBN Governor

    The Nigeria Deposit Insurance Corporation (NDIC) has reiterated its commitment to strengthen its collaboration with the Central Bank of Nigeria (CBN) towards ensuring safe, sound and stable financial system in the country.

    The Managing Director/Chief Executive of NDIC, Alhaji Umaru Ibrahim, who led the senior management of the corporation to pay a courtesy call on the new CBN Governor, Mr Godwin Emefiele, congratulated him on his well-deserved appointment and expressed confidence in his ability to continue to transform the nation’s financial system.

    Alhaji Ibrahim observed that over the years, the two institutions had played complementary roles in banking supervision, particularly in the aftermath of 2008 banking crisis and the emergence of the Bridge Banking which was a novel initiative in Africa.

    The NDIC boss pointed out the need for both institutions to continue to work more closely to ensure the vibrancy of the nation’s banking sector. He recalled the various efforts and contributions of the executive committee on banking supervision and other CBN and NDIC joint committees on critical issues affecting the financial sector, saying that the nation’s economy had always been better off for the collaborative efforts.

    Responding, the new CBN Governor expressed his appreciation for the visit and pointed out that the apex bank had always enjoyed harmonious working relationship with the Corporation.

  • NDIC to pay MFB depositors

    The Nigeria Deposit Insurance Corporation (NDIC) has commenced the verification and payment of insured deposits of 33 out of 83microfinance banks (MFBs) whose licences were recently revoked by the Central Bank of Nigeria (CBN).

    The first phase of the deposit pay-out of the 33 closed MFBs would cover total deposit liabilities of N588, 685,792.25 and each depositor would receive a maximum of N200, 000.

    As part of the verification and payment exercise being  undertaken by staff of the body, affected depositors are to report to the last known addresses of their closed MFBs with evidence of account ownership, including passbooks, cheque books and personal identification documents such as national identity cards, drivers’ licences and voters cards. Depositors without valid identification documents are to obtain introduction letters with their photographs and the letters duly signed by traditional rulers of their localities or local government chairmen.

    The depositors are also requested to take along details of alternative bank accounts operated in any of the existing banks into which their insured claims could be paid while those without bank accounts have been asked to provide details of accounts of close relatives to which their payment could be made.

    In a related development, the corporation has commenced verification and payment of N125 million as first liquidation dividend of 50 kobo each to shareholders of the defunct Rims Merchant Bank at its Abuja and Lagos Offices and eight zonal offices nationwide.