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  • NDIC: deposit insurance system contributes to financial safety net

    NDIC: deposit insurance system contributes to financial safety net

    The Nigeria Deposit Insurance Corporation (NDIC) has said the deposit insurance system is implementing an important component of the nation’s financial safety net.

    Its Managing Director, Bello Hassan made this known during the Editors Forum in Lagos at the weekend.

    He said the corporation’s operations focuse on minimising bank runs and failures through strict banking supervision, reimbursement of insured depositors in the event of bank failure, and orderly liquidation of failed banks. This, he said, complements the efforts of the Central Bank of Nigeria (CBN) to achieve a secure and stable banking system.

    “It also supports the fiscal authority in maintaining stability within the broader financial system, serving as the foundation for economic growth and development,” Hassan said.

    He noted that NDIC had at various times confronted the same challenges as other financial safety-net players affecting the nation’s financial system as a result of the impact of macroeconomic factors and the changing dimensions of the financial services industry which is constantly evolving.

    “Though some of the challenges are universal, others are of course unique and domesticated. It is within this context that the NDIC aligns itself with the Central Bank of Nigeria’s efforts towards strengthening the banking industry through enhancing prudential thresholds and other regulatory instruments while deepening engagement and collaboration with all relevant stakeholders in the Nigerian financial system to effectively address challenges and implement solutions,” he said.

    According to the NDIC boss, it is against this background that they chose the theme of the forum: “Stocktaking of Deposit Insurance Practice: Assessing the Past, Evaluating the Present and Forecasting the Future”.

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    He discussed issues around  the adequacy of the deposit insurance coverage; faster reimbursement of depositors in the event of bank failure; and of course, the roles of the media in promoting the stability of the financial system amongst others.

    He reiterated that NDIC’s vast experience at the forefront of deposit insurance practice in Africa coupled with the Corporation’s resilience in the face of challenges and threats is based on its  efforts to achieve its vision: “To be one of the best deposit insurers in the world”.

    “The roadmap outlined in our 2021-2025 Strategic Plan, takes into consideration the realities and future trends, as well as sets out targets and objectives to ensure that the corporation fulfills its mandate by providing excellent and efficient services to our stakeholders across board,” he said. 

    Hassan said the corporation has introduced the Single Customer View (SCV) framework that has enhanced speedy payment of insured sums to depositors of closed banks;  enhanced collaboration with the bar and bench, leading to speedy prosecution and more informed judgements on failed banks cases, including resolution of long-drawn cases of closed banks such as Fortune and Triumph Banks in-liquidation and equally put in place policy and framework for out-of-court settlement which had enabled us resolve some hitherto protracted failed bank litigations.

    Also, in complimenting the consumer protection efforts of the CBN, NDIC has enhanced public awareness on deposit insurance and financial literacy to reduce the rate at which small depositors are being defrauded, thereby enhancing confidence in the banking system.

    It has also invigorated our liquidation activities, and greatly increased debt recovery rate leading to the declaration of 100 per cent liquidation dividends to uninsured depositors of over 20 deposit money banks in-liquidation as well as payments to other stakeholders such as creditors, ex-staff and shareholders; and improved its system, process and procedures to promote transparency and accountability in our operations, among other humble achievements.

  • NDIC raises concerns over asset liability mismatch in banking sector

    NDIC raises concerns over asset liability mismatch in banking sector

    The Nigeria Deposit Insurance Corporation (NDIC) has identified a significant challenge that could jeopardize the stability of the banking sector.

    The NDIC has discovered what it refers to as “asset liability mismatch” during its review of banks’ risk management practices.

    According to the Managing Director of the NDIC, Hassan Bello, the effective management of assets and liabilities is crucial for promoting the stability of banking operations.

    Mr. Bello further emphasised that the significant maturity mismatch between banks’ available funding and the tenors required by fund seekers could prevent banks from meeting their obligations, including meeting depositors’ demand.

    The primary source of funds for Nigerian banks is generally short-term in nature, while the demand, particularly by medium to long-term seekers, tends to be for more extended periods. This disparity has resulted in maturity mismatch, presenting high vulnerability to risks and potentially endangering the safety and stability of the banking sector.

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    The NDIC’s discovery of this issue is a warning sign to the banking sector on the need for more effective risk management practices. The survival of banks and the protection of depositors’ funds require matching assets’ tenors to their respective liabilities.

    It is not clear at this point which banks have been affected by this challenge. However, the implications of such risks are vast and could result in dire consequences if not adequately managed.

    Bello stated that “as regulators and supervisors within the financial sector, our concern would surely be beyond managing the above risks. We must deeply think on how to create enabling policies and frameworks that will support the supply side for our banks.”

  • How to prevent banks from distress, by NDIC

    How to prevent banks from distress, by NDIC

    Nigeria Deposit Insurance Corporation (NDIC) has reiterated that timely and effective resolution of issues leading to distress in banks is imperative to maintaining the banking system’s stability.

    The corporation, which is responsible for preventing bank depositors from losing their monies, emphasised that the success of any resolution option depends to a large extent on how promptly the problem of the bank is identified and addressed by the bank and the regulators.

    NDIC has paid over N1.6 billion to over 40,000 depositors of recently-failed banks besides over N45.4 billion paid in June 2023 to depositors of 20 banks that collapsed, with another N16 billion liquidated dividend waiting to be paid.

    While presenting a paper on ‘Recent Developments in Banks Distress Resolution: Lesson for Nigeria,’ NDIC’s Deputy Director, Bank Examination Department, Daniel Udechukwu, during the 20th edition of the NDIC Finance Correspondents Association of Nigeria (FICAN) Workshop in Owerri, Imo State, noted that industry players, regulators, and supervisory agencies must pay attention to causes to put in place preventive mechanisms.

    According to him, internal factors that contribute to banks’ failure are mostly linked to failures arising from banks’ policies; weak risk management; weak credit policies; connected lending and insider loans; credit concentration; loan/deposit mismatch.

    Others are ineffective and inadequate recovery optimistic assessment of borrower’s prognosis, ability, and character; weak human resource and capacity, among others.

    Failures arising from banks’ operations are also fast means to distress in banks where laissez-faire credit review procedures; failure of information technology; ineffective; and poor strategic planning and implementation are rampant.

    Given the above, Udechukwu noted that to avoid banks going into distress that might lead to a collapse, which may in turn impact heavily on the industry and the nation’s economy, several steps must be taken, and not in isolation from each other, which includes the need to strengthen the resolution and recovery plan framework to include all banks and not only Domestically Systemically Important Banks (D-SIBs).

    Saying that basic risk management practices and governance arrangement must be ensured, Udechukwu added: “The first and most important source of operational and financial resilience lies on the banks’ own risk management and governance arrangement.

    “There is need for supervisors to robustly assess banks governance and risk management practices as well as ensure strong supervisory approach for liquidity risk management.

    “To stem distress in D-SIB, there is a need for public sector support to ensure financial stability and to protect the economy.

    “There is the need for supervisors to continually and comprehensively assess the viability/sustainability of banks’ business models, and for supervisors to proactively engage with outlier banks.

    “Supervisors should assess the impact of changes in the external environment on banks.

    “Supervisors should assess banks’ business models in a forward-looking manner, taking into account potential changes in their operating environment over a medium/long term. Liquidity risk supervision needs to be enhanced in the light of recent experience.

    Udechukwu further said specific features of a bank’s business model or asset/liability structure should be adequately taken into account, both by the bank and by the supervisory authorities in liquidity risk management.

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    He also said liquidity stress testing conducted by banks should be supplemented by supervisory stress testing of liquidity, adding that banks should have sufficient tools to ensure appropriate action to remediate supervisory concerns with respect to liquidity risk management and funding profile.

    “They should ensure that the tools can be deployed sufficiently quickly. Rules-based approach on its own is unlikely to appropriately identify, assess and allow the timely mitigation of key risks to a bank’s safety and soundness and broader financial stability.

    “It should be complemented with supervisory authorities exercising judgments. Supervisory authorities should review the supervisory toolkits to ensure they are sufficient to drive concrete actions on banks,” the NDIC Deputy Director added.

    Continuing, he stated: “There is a need for timely and effective cross-border supervisory cooperation to ensure global financial stability, monitor and manage risks at both consolidated group and legal entity level.

    “The is the need for supervisory authorities to take into account possible limitations in transferring capital and liquidity resources within banking groups, which may arise from national laws, supervisory approaches or banks’ internal managerial practices.

    “The liquidity regulations alone cannot prevent all liquidity runs on banks in an age characterized by easy access to information as well as banking services via various digital tools”.

  • NDIC lists ways to prevent banks’ distress

    NDIC lists ways to prevent banks’ distress

    The Nigeria Deposit Insurance Corporation (NDIC) has reiterated that timely and effective resolution of issues leading to distress in banks is imperative to maintaining the banking system’s stability.

    The corporation which is responsible for preventing bank depositors from losing their monies however emphasised that the success of any resolution option depends to a large extent on how promptly the problem of the bank is identified and addressed by the bank and the regulators.

    NDIC has paid over N1.6b to over 40,000 depositors of recently failed banks besides over N45.4b paid in June 2023 to depositors of 20 banks that collapsed with another N16b liquated dividend waiting to be paid.

    While presenting a paper on recent developments in banks distress resolution: Lesson for Nigeria, NDIC’s Deputy Director, Bank Examination Department, Daniel Udechukwu, during the 20th edition of the NDIC Finance Correspondents Association of Nigeria (FICAN) Workshop in Owerri, Imo state on Wednesday, noted that industry players, regulators, and supervisory agencies must pay attention to causes to put in place preventive mechanisms.

    According to him, internal factors that contribute to banks’ failure are mostly linked to failures arising from banks’ policies; weak risk management; weak credit policies; connected lending and insider loans; credit concentration; loan/deposit mismatch.

    Others are ineffective and inadequate recovery optimistic assessment of borrower’s prognosis, ability, and/or character; weak human resource and capacity, among others.

    Failures arising from banks’ operations are also fast means to distress in banks where Laissez-faire credit review procedures; failure of information technology; ineffective; and poor strategic planning and implementation are rampant.

    Given the above, Udechukwu noted that to avoid banks going into distress that might lead to a collapse which may in turn impact heavily on the industry and the nation’s economy, several steps must be taken and not in isolation from each other which includes the need to strengthen the resolution and recovery plan framework to include all banks and not only D-SIBs.

    Noting that basic risk management practices and governance arrangement must be ensured, Udechukwu added: “The first and most important source of operational and financial resilience lies in the bank’s own risk management and governance arrangement.

    “The need for Supervisors to robustly assess banks governance and risk management practices as well as ensure strong supervisory approach for liquidity risk management. To stem distress in domestically systemically important banks (D-SIB), there is a need for public sector support to ensure financial stability and to protect the economy.

    “The need for supervisors to continually and comprehensively assess the viability/sustainability of banks’ business models. Supervisors to proactively engage with outlier banks. Supervisors should assess the impact of changes in the external environment on banks.

    “Supervisors should assess banks’ business models in a forward-looking manner, taking into account potential changes in their operating environment over a medium/long term

    “Liquidity risk supervision needs to be enhanced in the light of recent experience. Specific features of a bank’s business model or asset/liability structure should be adequately taken into account, both by the bank and by the supervisory authorities in liquidity risk management.

    “Liquidity stress testing conducted by banks should be supplemented by supervisory stress testing of liquidity. Banks should have sufficient tools to ensure appropriate action to remediate supervisory concerns concerning liquidity risk liquidity risk management and funding profile.

    Read Also: NDIC to recover N400b loans from liquidated banks

    “They should ensure that the tools can be deployed sufficiently quickly. Rules-based approach on its own is unlikely to appropriately identify, assess, and allow the timely mitigation of key risks to a bank’s safety and soundness, and broader financial stability. It should be complemented by supervisory authorities exercising judgments.

    “Supervisory authorities to review the supervisory toolkits to ensure they are sufficient to drive concrete actions on banks. There is a need for timely and effective cross-border supervisory cooperation to ensure global financial stability. There is a need to monitor and manage risks at both consolidated group and legal entity levels.

    “The need for supervisory authorities to take into account possible limitations in transferring capital and liquidity resources within banking groups, which may arise from national laws, supervisory approaches or banks’ internal managerial practices.

    “The liquidity regulations alone cannot prevent all liquidity runs on banks in an age characterized by easy access to information as well as banking services via various digital tools.”

  • NDIC to recover N400b loans from liquidated banks

    NDIC to recover N400b loans from liquidated banks

    The Nigeria Deposit Insurance Corporation (NDIC) is expected to recover more than N400 billion from loans granted by liquidated deposit money banks.

    Managing Director, Nigeria Deposit Insurance Corporation (NDIC), Bello Hassan, said the corporation is employing the assistance of anti-graft agencies and the judiciary to fast-track the recovery because the payment of depositors of the liquidated banks is not negotiable.

    Bello spoke in Owerri, Imo State yesterday while declaring open the 20th edition of the NDIC Finance Correspondents Association of Nigeria (FICAN) Workshop where he noted that NDIC has paid over N1.6 billion to over 40,000 depositors of the recently liquidated banks.

    Stressing that NDIC is alive to its responsibilities to Nigerian depositors, Bello said one of the greatest challenges that NDIC is facing is debt recovery.

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    “A lot of customers of banks in liquidation that borrowed are not willing to repay those debts.

    “I want to put it on record that those debts, although those loans that were granted were granted out of deposits of people that were collected in the banks, so it is only when those debtors pay back that NDIC will now be able to pay the depositors of those failed banks. That is one of the greatest challenges we are facing.

    “The value of the debt we are about to recover if you take into account all the banks in liquidation, that is the DMBs, microfinance banks, the primary mortgage institution, this is a debt that is well beyond N400b and that is what we are expecting to recover so we can pay the depositors of those banks in liquidation,” Bello said.

    “Already we have made substantial recovery and we have made some payments and that is why in the recent past, we have put our adverts that depositors of those failed banks should come forward so we can verify them in other to pay what we call liquidation dividends.

    “Even for those banks that recently closed, we have also made substantial payments of the insured amounts as of today we have paid more than N1.6 billion to more than 40,000 depositors”.

    According to him, even depositors who were unable to meet certain criteria during their bank registration exercise should exercise no worry as their deposit will not be in jeopardy.

    “We have been calling depositors of those institutions especially those that did not have BVN attached to their files to come forward so we can verify them to pay them the insured amount.

    “When we finish that, we have already commenced the valuation and assessments of assets by those banks in liquidation so that we can equally dispose of them and first of all pay the liquidation dividends which are over and beyond the insured amount.

    “So we are using this as a medium to call on depositors of those banks to come forward to our office in Abuja, Lagos, and across the six geo-political zones to be verified to pay them the verified amount”.

    Bello said the collaboration of the anti-graft agencies and the judiciary is critical to the recoveries made by the corporation.

    Saying that litigations often slow down the corporation in dispensing with cases before it, Bello noted, “Our request to the government is for the government to assist us in making sure that we expedite the litigation process.

    “If there’s a way we can bring in the stakeholders, the legislature, the Judiciary together so that anytime we take our decisions and cases before the court, cases are given expedited hearing so that justice can be dispensed.

    He also stated that the imminent recapitalization of banks announced by the Central Bank of Nigeria (CBN) is the right step as it is healthy for the economy that is aiming to absorb over $1 trillion in Gross Domestic Product (GDP)

    He said the NDIC is awaiting further direction over the recapitalization, “It’s important for us to wait and see the clear direction of what that requirement is going to be and how many levels of capitalization will be required.

    “I know as we speak, when you look at the performance of the industry, it’s very sound in looking at the key financial soundness indicators of capital adequacy, liquidity, earnings, and quality of assets but certainly the government is trying to grow our GDP to $1 trillion, we will also need bigger banks to be able to play in that space and I believe that it’s within that context that the CBN is looking at capitalizing those banks, so we await the CBN for further details on this process”, he added.

  • Shun wonder banks, NDIC advises public

    Shun wonder banks, NDIC advises public

    The Nigeria Deposit Insurance Corporation of Nigeria (NDIC) has advised depositors, traders and businessmen  to avoid patronage of wonder banks and ponzi schemes which always leave their victims with untold stories. 

    NDIC Managing Director/CEO, Bello Hassan made the disclosure at the just completed Lagos International Trade Fair organised by the Lagos Chamber of Commerce and Industry, advised them to always ensure that their funds are saved in licensed banks.

    He disclosed that while the NDIC continues to collaborate with the CBN in ensuring the effective supervision of banks and adherence to prudential thresholds and the Code of Corporate Governance for banks to safeguard the safety and stability of the Nigerian banking system, I would like to therefore call on the ,” he said.

    In a statement, Hassan said NDIC’s key priorities remain to  protect the interests of small depositors by providing a mechanism for reimbursement in the event of imminent or actual bank failures amongst others. 

    He said that NDIC was established by the Federal Government under the NDIC Decree 22 of 1988, which has been replaced by NDIC Act No. 16 of 2006 and recently amended as the NDIC Act No. 33 of 2023. Contained therein is the feature of our public policy objective of the Deposit Insurance Scheme in Nigeria to protect inter of small depositors.  

    “This is done while entrenching safe and sound banking practices, contributing to an orderly payments system, and enhancing fair competition in the banking sector. Thus, the DIS is designed as a “risk minimiser” with core functions of deposit guarantee, bank supervision, distress resolution, and liquidation of failed insured deposit-taking financial institutions. The NDIC complements the Central Bank of Nigeria in ensuring the safety, soundness, and stability of the financial system thereby instilling public confidence in the nation’s banking system,” he said.

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    He said that following the recent revocation of licenses of some Microfinance Banks and Primary Mortgage Banks by the Central Bank of Nigeria (CBN), the NDIC promptly commenced the liquidation of these banks and began disbursing insured sums to depositors within a record time of three days of the banks’ closure. 

    “It’s worthy to note that as of September 22, 2023, the Corporation had paid a cumulative insured sum of N1.393 billion to 36,163 depositors of 110 closed MBs and three Primary Mortgage Banks.  Most importantly payments of the statutory insured sums are still ongoing, and depositors with funds exceeding the insured limit will receive liquidation dividends after the recovery of debts and the sale of the closed banks’ physical assets,” he said.

    He disclosed that the Corporation is currently in the process of verifying and paying liquidation dividends to depositors and stakeholders of 20 banks in liquidation including Allied Bank, Peak Merchant Bank, Commerce Bank, Continental Merchant Bank, Financial Merchant Bank, Fortune Bank, Gulf Bank, Hallmark Bank, Icon Merchant Bank, Liberty Bank, Nigeria Merchant Bank, North South Bank, Premier Commercial Bank, Prime Merchant Bank, Progress Bank, and Merchant Bank. 

    He said that while the NDIC continues to collaborate with the CBN in ensuring the effective supervision of banks and adherence to prudential thresholds and the Code of Corporate Governance for banks to safeguard the safety and stability of the Nigerian banking system, I would like to therefore call on the general public, especially traders and businessmen, to always ensure that their funds are saved in licensed banks and to avoid patronage of wonder banks and ponzi schemes which always leave their victims with untold stories,” he said.

  • CBN liquidates Allied Bank, Commerce Bank, Fortune Bank, Gulf Bank, Hallmark Bank, 15 others —NDIC

    CBN liquidates Allied Bank, Commerce Bank, Fortune Bank, Gulf Bank, Hallmark Bank, 15 others —NDIC

    The Nigeria Deposit Insurance Corporation (NDIC) has paid N1.39 billion to 36,163 depositors of 110 closed microfinance banks and three primary mortgage banks.

    According to the CEO of NDIC, Bello Hassan, this followed the recent revocation of some MFBs and PMBs licences by the Central Bank of Nigeria (CBN), revealing that the payments of the statutory insured sums are still ongoing.

    The NDIC boss explained that depositors with funds exceeding the insured limit would receive liquidation dividends after recovering debts and selling the closed banks’ physical assets.

    Hassan disclosed this at the corporation’s ‘Special Day’ at the 2023 Lagos International Trade Fair on Thursday in Lagos.

    Hassan said the corporation promptly commenced the liquidation of these banks and began disbursing insured sums to depositors within a record time of three days of the banks’ closure.

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    “In another development, the corporation is currently in the process of verifying and paying liquidation dividends to depositors and stakeholders of 20 banks in liquidation, including Allied Bank, Peak Merchant Bank, Commerce Bank, Continental Merchant Bank, Financial Merchant Bank, Fortune Bank, Gulf Bank, Hallmark Bank, Icon Merchant Bank, Liberty Bank, Nigeria Merchant Bank, North South Bank, Premier Commercial Bank, Prime Merchant Bank, Progress Bank, and Merchant Bank,” he said.

    Hassan urged the public, especially traders and businesspeople, to keep their funds in licensed banks, advising them to avoid patronising wonder banks and Ponzi schemes. “The NDIC, in its efforts to boost depositors’ confidence in the financial landscape, has continued to address genuine cases of infractions and complaints in relation to their respective insured institutions,” said Mr Hassan.

  • NDIC trains 200 students in savings, budget culture

    NDIC trains 200 students in savings, budget culture

    Two hundred students from Government Technical College, Enugu have benefited from savings and budget training organised by the Nigeria Deposit Insurance Corporation (NDIC).

    The corporation trained the students while commemorating the “2023 World Saving Day” in Enugu with the theme: “Conquer Your Tomorrow through Savings”.

    The NDIC Coordinator of the programme, Mr. Abdullahi Ubam,  addressing the students, said the programme was part of government’s initiatives towards encouraging financial savings among students.

    He said the World Savings Day is observed annually across the globe on October 31 to inform people about the idea of saving their money in a bank.

    He added that the day was also set aside to increase public awareness of the importance of savings for modern economies and for individuals.

    Ubam said the programme was targeted at educating students on the need to imbibe the culture of saving, adding that it was meant to catch them young.

    Ubam said the initiative would encourage financial prudence and resource management among students as well as inculcate the knowledge of savings in them so that they would grow up with it.

    The Director, Schools Department, Enugu State Ministry of Education, Mrs. Francisca Nwokolo, hailing NDIC for organising the training, said it would help them to be focused in life, especially in financial related matters.

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    She appealed to the Federal Government to extend the training to all secondary schools in the country, stressing that it would help to catch them young.

    “The students need the experience regarding saving and the difference between needs and wants, so that it can reflect in their lives,” she said.

    The Principal of the college, Mr. Christopher Isiefe, welcoming the NDIC team, described the training as wonderful, stressing that every human needed to save for future.

    Commending NDIC, Isiefe advised the students not to be wasteful in life, but to save little they had.

    One of the students, Chijoke Nwodu from Electrical department, said he was impressed with the training, adding that he now understands the importance of savings. 

  • Senate on oversight visit to NDIC

    Senate on oversight visit to NDIC

    Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Mukhail Abiru on ed members of the committee on an oversight visit to the Lagos office of the Nigeria Deposit Insurance Corporation(NDIC).

    This visit is in accordance with sections 62,88 and 89 of the Constitution of the Federal Republic of Nigeria 1999 (as  amended) that empower the National Assembly to perform legislative oversight on all Ministries, Departments and Agencies (MDAs) and Government-owned Enterprises (GoES) , for judicious utilization of Government funds.

    Abiru, who is the lawmaker representing the Lagos East Senatorial District, said that the committee came to assess the performance of the corporation and discuss its challenges with the hope of proffering necessary support  to enhance its effectiveness.

     According to him, “The NDIC plays a critical role in safeguarding the stability and integrity of our financial  system. It is our responsibility as lawmakers to ensure that it is fulfilling its mandate  effectively and efficiently.

    “The banking and financial sector is the backbone of any economy, and it is crucial that  we maintain the highest standards of oversight and regulation to ensure the safety and  security of the funds entrusted to these institutions by the public.”

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    The NDIC, as the primary  insurer of deposits in Nigeria, is tasked with the responsibility of protecting depositors’  funds and promoting sound banking practices”.

    Senator Abiru who is an accomplished economist, accountant and retired bank chief Executive, also challenged NDIC on innovation in the digitally-driven banking era. “The Nigerian banking and financial landscape are continuously evolving, and the NDIC’s  role has become even more critical. In recent years, we have witnessed an expansion of  digital financial services, fintech innovation, and increased financial inclusion”, Senator Abiru was quoted to have said in a statement  issued by his media aide, Mr. Enitan Olukotun, in Lagos on Tuesday.

    The management team of NDIC, led by the Managing Director/ Chief Executive Officer, Mr. Bello Hassan, FCA, thanked the Senate delegation for their insights and valuable advice on how to improve the operational efficiency of the corporation.

    In conclusion, the Senate Committee pledged to work with the Corporation and other stakeholders towards the protection of the deposit of Nigerians in the banks.

    Other distinguished Senators who are members of the Senate Committee on Banking, Insurance and other Financial Institutions that were present include: Senator Aminu Waziri Tambuwal (Sokoto South), Senator Lawal Adamu Usman (Kaduna Central), Senator Ibrahim Khalid Mustapha (Kaduna North), Senator Habib Mustapha (Jigawa Central) and Senator Haruna Manu (Taraba Central).

  • NDIC disburses N1.1b to failed bank depositors

    NDIC disburses N1.1b to failed bank depositors

    Nigeria Deposit Insurance Corporation (NDIC) has disbursed a cumulative insured N1.084 billion to 29,573 depositors as  at September 22, this year.

    The beneficiaries are 29,573 depositors of closed micro finance banks (MFBs) and primary mortgage banks (PMBs).

    Managing Director, Nigeria Deposit Insurance Corporation (NDIC), Mr. Bello Hassan, during the NDIC day at the 18th Abuja International Trade Fair, explained that following the revocation of licences for 179 MFBs and four PMBs by the Central Bank of Nigeria (CBN), the corporation commenced liquidation of the banks and disbursing insured sum within seven days of the closures of these banks.

    Hassan, who was represented by the Director Communication and Public Affairs Department,  Bashir  Nuhu, said: “It’s important to note that as at 22nd September 2023, the corporation had paid a cumulative insured sum of N1.084 billion to 29,573 depositors of the closed MFBs/PMBs.

    “It is, however, instructive to let you know that payments are still ongoing and depositors with funds exceeding the insured limit will receive liquidation dividends after recovery of debts and sale of physical assets of the closed banks.”

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    He also said NDIC is  verifying and paying liquidation dividends to depositors and stakeholders of 20 closed banks.

    “This is crucial for financial inclusion because it gives Nigerians the assurance that their money is safe and accessible when needed.”

    All these, he noted, were “part of the corporation’s contributions of ensuring the stability of the financial system by effectively complementing the CBN in supervising  the banking sector and safeguarding depositors funds from the adverse effects of bank failures when it occurs.”

    These also he stated are relevant given the determination of government’s effort towards achieving sustainable growth by strengthening the financial environment to boost economic growth.

    He further emphasized that NDIC’s top priority is their depositors and the corporations foundation is built on ensuring the safety and security of their deposits.

    Hassan declared also that “we at the NDIC hold the strong view that “Knowledge is Power”, and we believe that an informed depositor can make better financial decisions. I urge the public to be cautious of illegal fund managers, often referred to as “Wonder Banks” or “Ponzi Schemes.”

    “These entities offer high-interest rates and profits that are too good to be true, leading to devastating losses for many.

    “It’s important to note that these ‘wonder banks’ are neither licensed by the Central Bank of Nigeria nor covered by the NDIC deposit insurance scheme.

    “Members of the public are therefore advised to patronize only banking institutions with a display of the NDIC Stickers carrying the words: “Insured by NDIC” in their banking halls or entrances and various branches across the country.