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Tag: NDIC

  • NDIC: Mgt, directors of failed Skye Bank under probe

    The Nigeria Deposit Insurance Corporation (NDIC) and the Central Bank of Nigeria (CBN) are monitoring the investigations of law enforcement agencies instituted against the directors and management of the failed Skye Bank Plc to determine their culpability in the failure of the bank.

    The Managing Director and Chief Executive of the NDIC, Umaru Ibrahim, announced this at the opening ceremony of the Corporation’s, 2018 Sensitisation seminar for Federal High Court Judges in Abuja.

    He said the Corporation’s Risk Assessment and Forensic Investigation Reports revealed that the erstwhile management of the failed bank contributed to its failure by engaging in insider abuse, poor corporate governance and banking malpractices. He added that the reports identified various malpractices such as fraudulent false accounting, manipulation of accounting records to present false profits and ratios, unlawful loan and credit facilities, non-disclosure of directors’ interests and lending beyond the single obligor limit.

    The NDIC chief noted that the Corporation’s implementation of the bridge bank resolution option that established Polaris Bank Ltd that assumed the assets and liabilities of the defunct Skye Bank Plc, resulted in depositors’ unhindered access to their funds, the continuity of the operations of about 300 branches and the preservation of over 6,000 jobs.

    He said participants that the Corporation has commenced the payment of insured deposits to depositors of the 153 Microfinance and six Primary Mortgage Banks whose licenses were recently revoked by the CBN. He noted that the Corporation performs this statutory mandate by its appointment as Liquidator through a Winding Up Order granted by the Federal High Court.

    The NDIC chief described the collaboration between the Corporation and the Judiciary as a valuable engagement towards the development of the financial system and the effective implementation of the Corporation’s mandate. He said the seminar for Federal High Court Judges with the theme “Challenges to Deposit Insurance Law and Practice in Nigeria” was specifically designed to address topical issues in Bank Supervision such as the regulatory framework of systematically important banks, the robustness of the legal system to facilitate criminal prosecution of Bank Directors and debt recovery under the Failed Banks Act.

    While commending the NDIC for its continued interactions with the Federal High Court through the sensitisation seminars, the Chief Judge of the Federal High Court, Honourable Justice Abdul A. Kafarati said the impact has been a deeper appreciation of the implications of the mandate and activities of the Corporation which has led to more proactive and accurate adjudication of cases brought before the courts. He expressed optimism that the broadening of the scope to include topical issues will further deepen the impact of the seminar towards addressing current regulatory issues in the financial system and the dispensation of more informed judgments.

     

  • NDIC says N28.48bn recovered from debtors of DMBs in-liquidation

    The Nigeria Deposit Insurance Corporation (NDIC), said it recovered N28.48 billion from debtors of Deposit Money Banks (DMBs) in-liquidation as at Dec. 31, 2017.

    Alhaji Umaru Ibrahim, NDIC’s Managing Director/Chief Executive Officer said this in the Corporation’s 2017 Annual Report, a copy of which was made available to the News Agency of Nigeria (NAN) on Sunday in Abuja.

    Ibrahim said the sum was higher than the N28.16 billion realised in 2016.

    “To date, a total of N125.13 million was realised from debtors of closed Microfinance Banks (MFB) as at Dec. 31, 2017.

    “Debt recoveries from Primary Mortgage Banks (PMBs) increased by 22.60 per cent from N195.17 million in 2016 to N239.27million in 2017.

    “The sum of N21.39 billion was realised from disposal of physical assets of closed DMBs compared to N21.21 billion in 2016.

    “The sum of N386.11million was also recovered from the sale of physical assets of MFBs in the period under review as against N361.45 million recovered in 2016.

    “Also, the value of physical assets recovered from PMBs was N77.87 million in 2017, compared to N75.50 million as at Dec. 31, 2016,’’ Ibrahim said.

    According to Ibrahim, the NDIC paid N11.50 billion to depositors, creditors, shareholders and other stakeholders of closed financial institutions in the year under review.

    The NDIC boss said the corporation’s Deposit Insurance Fund (DIF) stood at N959.55 billion, Special Insured Institutions Fund (SIIF) was N114.39 billion, and its Non-Interest Deposit Insurance Fund (NIDF) stood at N0.693 billion in the period under review.

    Ibrahim said NDIC operating income increased from N122.68 billion in 2016 to N146.47 billion in 2017 and its total operating expenses decreased from N93.60 billion to N63.55billion in 2017.

    He further said that the corporation remitted N22.77 billion per audit to the Consolidated Revenue Fund (CRF) of the Federation as at Dec. 31, 2017. (NAN)

  • NDIC saved N949b depositors’ funds Skye Bank’

    The Nigeria Deposit Insurance Corporation (NDIC) said it saved about N949.6 billion depositors’ funds in failed Skye Bank.

    Managing Director of the Corporation, Alhaji Umaru Ibrahim, disclosed this in Benin City on Tuesday at the opening of a workshop for financial journalists organised by the NDIC.

    He said that the saving was achieved through the adoption of “bridge bank option’’, adding that the corporation also saved over 6,000 jobs in 277 branches of the failed bank.

    The News Agency of Nigeria (NAN) recalls that NDIC sacked the board and management of Skye Bank on Sept. 22 and changed the management and renamed the bank as Polaris Bank, using bridge bank liquidation option.

    Ibrahim, who was represented by a Director in the corporation, Mr Mohammed Umar, said that the bridge bank liquidation option was less disruptive to rendition of services unlike outright liquidation.

    “With the bridge bank option, the depositors of the defunct Skye Bank Bank Plc are guaranteed access to their total deposits.”

    He said that all those that contributed to the failure of the bank were being investigated by relevant law enforcement agencies to determine their levels of culpability.

    Ibrahim said that the revocation of banking license of defunct Skye Bank and establishment of a bridge bank was done entirely by the NDIC and not the CBN as reported by the media.

    “It is important to stress that while the roles of the CBN and the NDIC complement each other, a clear distinction exists in their roles in the handling of failed or failing financial institution.”

    He said that the CBN recently revoked the licenses of 154 micro finance banks and six primary mortgage banks due to insolvency.

    Ibrahim said that the affected institutions were closed because some were found to have insufficient assets to meet their liabilities.

    Others, he said, had their capital to risk-weighted assets ratio and regulatory capital below the prescribed minimum by the CBN.

    He said that a number of banks had ceased to carry on with the type of banking business for which licenses were issued, while others had gone into voluntary liquidation.

     

    The managing director said that NDIC had started verification of insured deposits of insured depositors and would start paying the verified claims to appropriate depositors in these liquidated institutions.

     

    He promised that the NDIC, in collaboration with all relevant key players in the financial system, would continue to work on several initiatives to accelerate financial literacy and financial inclusion, especially among rural communities.

     

  • NDIC saves 6,000 jobs with Polarise Bank

    The Nigeria Deposit Insurance Corporation (NDIC) said it saved over 6,000 jobs  with Polarise Bank. Its Managing Director/Chief Executive, Umaru Ibrahim, said the jobs were saved through its intervention which prevented the defunct Skye Bank from sinking.

    He said Polaris Bank was able to guarantee the seamless and continuous banking operations in the 277 branches of the defunct Skye Bank. Over 6,000 jobs were saved in the process and depositors had unhindered access to deposits in excess of N949.60 billion as at June 2018, he added.

    The NDIC, in collaboration with the Central Bank of Nigeria (CBN),  had adopted ‘bridge bank’ option to resolve the failure of Skye Bank Plc, which involved the organisation and incorporation of Polaris Bank Limited, to take over the assets and liabilities of the defunct Skye Bank Plc.

    Represented by the commission’s Director of Insurance & Surveillance Department (ISD), Mr. Mohammed Yayangida Umar, at the workshop for business editors and Finance Correspondents Association of Nigeria (FICAN) in Benin, the NDIC chief said since inception in 1989, the organisation has recorded tremendous stride in the implementation of its mandate and in ensuring that the over-riding public policy objectives for establishing an explicit Deposit Insurance System (DIS) in the country are fully realised.

    “Depositors in Deposit Money Banks (DMBs), Non-Interest Banks (NIBs) and Primary Mortgage Banks (PMBs) are reimbursed up to a maximum limit of N500,000, while the maximum insured coverage for depositors of Microfinance Bank (MfBs) is N200,000.

     

    “However, it is important to also stress that depositors who have funds in excess of the insured limits are paid dividends from the liquidation of failed banks depending on the quality of their assets and the outcome of debt recoveries by the NDIC.

    “In most of the media reports following the revocation of the banking license of the defunct Skye Bank, the CBN was erroneously credited with the establishment of the bridge bank (Polaris Bank) which is the exclusive responsibility of the NDIC as provided for under its enabling Act.”

    He therefore urged financial correspondents to be constantly aware of the details of the roles and responsibilities of all the regulators in the system for more accurate reporting of their activities.

    “In this respect, it is important to stress that while the roles of the CBN and the NDIC complement each other, a clear distinction exists in their roles in the handling of failed or failing financial institutions.

    “Also, the CBN recently revoked the licenses of 154 MFBs and six PMBs due to their insolvency. The affected institutions were closed because some were found to have insufficient assets to meet their liabilities, while others had their capital to risk-weighted assets ratio and regulatory capital below the minimum prescribed by the CBN.

    “Quite a number of the banks had ceased to carry on the type of banking business for which their licenses were issued for a continuous period of more than six months while others had gone into voluntary liquidation.

    “The NDIC has commenced verification of insured depositors and will soon start paying the verified claims to appropriate depositors in fulfilment of our core mandate.

    “From the record obtained so for, majority of the depositors especially in the MfBs, have less than N200,000 in their accounts, which implied that the NDIC will hopefully cover 100 per cent of the depositors,” he said.

  • NDIC assures 100% payment of depositors in revoked MFBs

    The Nigerian Deposit Insurance Commission, NDIC, yesterday said  following the recent revoked licences of 154 MFBs and six PMBs by the Central Bank of Nigeria (CBN) due to their insolvency, from the record obtained so far, majority of the depositors especially in the MFBs, have less than N200,000 in their accounts, implying that the NDIC will  cover 100 per cent of the deposited funds in the MFBs.

    Making this known at the NDIC special day at the ongoing Lagos international trade fair, the Managing Director  of NDIC, Umaru Ibrahim, said CBN revoked the licences due to erosion of their capital base, poor liquidity, inept management, as well as some insiders helping themselves with loans they never intend to pay back, and further worsened by boisterous life style of Management that remained at variance with the philosophy of microfinance banking operations.

    “ The NDIC has commenced verification of insured depositors and will soon start paying the verified claims to appropriate depositors in fulfilment of our core mandate. From the record obtained so far, majority of the depositors especially in the MFBs, have less than N200,000.00 in their accounts, which implied that the NDIC will hopefully cover 100per cent of the deposited funds in the MFBs”

    “It is useful to inform us that, the NDIC, in collaboration with the CBN, adopted bridge bank option to resolve the failure of Skye Bank

    Plc. A bridge bank is a temporary bank created to operate a failed bank until a buyer can be found. The benefit of a bridge bank is not far-fetched: The resolution option is less disruptive to rendition of bank services, unlike outright liquidation or depositors’ payoff. It is also less costly to the entire macro-economy, while staff are retained in the bridge bank.

  • NDIC assures 100% coverage of depositors in failed MFBs

    The Nigeria Deposit Insurance Corporation (NDIC) has said it will provide 100 per cent  cover for verified depositors claims depositors in failed 154 Microfinance Banks (MfBs).

    The  licences of the banks were revoked by the Central Bank of Nigeria (CBN) last month.

    It said from record obtained, majority of the depositors especially in the MfBs have less than N200,000 in their accounts.

    NDIC Managing Director and Chief Executive, Umaru Ibrahim said the corporation in fulfilling it’s core mandate of insuring depositors, will soon start paying the verified claims to appropriate depositors,including those in the six Primary Mortgage Banks (PMBs) whose licences were also revoked.

    He spoke yesterday in Lagos during the ongoing at Lagos International Trade fair organised by the Lagos Chamber of Commerce and Industry (LCCI).

    He said the licences were revoked due to erosion of their capital base,poor liquidity,inept management as well as some insiders helping themselves with loans they never intend to pay back.

    It was further worsened by boisterous lifestyle of management that remained at variance with the philosophy of microfinance banking operations.

    Represented by the Head,Communications and Public Affairs, Mohammed Ibrahim, the NDIC chief said the insurer  will continue to work with CBN to ensure effective supervision of banks to follow strictly the rules and regulations guiding banking operations.

    He said  the bridge bank option adopted in former Skye Bank now Polaris Bank was able to let it continue banking operations in the 277 branches of the bank, with over 6000 jobs  saved and depositors have unhindered access to deposits in excess of N949.60 billion as at June 2018.

    “Meanwhile, all those that contributed to the failure of the bank are being investigated by relevant agencies of the government and would be prosecuted to serve as deterrent to others,” he said.

    He explained that as provided for in the NDIC Act 2006, when financial institutions fail, depositors of Deposit Money Banks (DMBs), Non-Interest Banks (NIBs) and Primary Mortgage Banks (PMBs)are reimbursed up to a maximum limit of N500,000.00, while the maximun insured coverage for depositors of MFBs is N200,000.00. However, he added, it is important to also stress that depositors who have funds in excess of the insured limits are paid dividends from the liquidation of failed banks depending on the quality of their assets and outcome of debt recoveries by the NDIC.

     

    He said the NDIC will, with other stakeholders,  continue to protect  depositors in the domestic financial system against fragrant disregard of extant rules by management of financial institutions in terms of stalling the occurrence of unlawful insiders’ dealings, weak internal control and overall non-compliance to prudential guidelines.

     

  • NDIC seeks new rules to tackle financial crimes

    The Nigeria Deposit Insurance Corporation (NDIC) has called on regulators to take measures  that ensure early detection of financial crisis.

    He spoke at the International Association of Deposit Insurers  (IADI) Africa Regional Committee (ARC) workshop held in Lagos with the theme: Financial Stability, System-Wide Crisis Preparedness and Effective Bank Resolution.

    Ibrahim, who is the new Chairman of the body, said the fabric of the global financial stability is threatened by  monetary policy normalisation in some notable economies, which may result into sharp volatility and disruptions in financial markets.

    Other crisis include proliferation of digital currency such as Bitcoin as well as the activities of Fintech in general. These, he said,  have the tendency to jeopardize the efficacy of safety-met arrangement and prudential roles of the traditional banking system such that it becomes available to a smaller segment of the banking system.

    “Rising exposure of emerging markets to reversal of foreign portfolio inflows and US Dollar appreciation with the growing risk of protectionism and ongoing trade wars between the United States and the rest of the world- China,North America and Europe- could degenerate with negative implications for the global financial system stability”, he added.

    He said through the failure resolution mechanisms of NDIC, it had so far closed 52 deposit money banks (DMB) out of which 49 are currently in liquidation while the remaining are involved in litigations challenging the revocation of their licence by the CBN.

    Ibrahim said: “In the case of other deposit taking financial institutions, a total of 187 Microfinance banks (MFBs) and 42 Primary Mortgage Banks (PMBs) are currently in liquidation.”

    IADI Secretary General, David Walker said according to the International Monetary Fund  (IMF), there have been 124 financial crisis in the world since 1970.

     

     

     

  • NDIC ‘paid N11.5b to depositors’ in 2017

    About N11.50billion has been paid to financial institutions, the Managing Director and Chief Executive, Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim, has said.

    Ibrahim sad the payments were made to depositors, creditors, shareholders and other stakeholders of closed financial institutions in December, 2017.

    He spoke at the NDIC Special Day at the Abuja International Trade on the theme: ‘Enhancing SMEs in Agribusiness through innovative technology’, in partnership with the Abuja Chamber of Commerce and Industry (ACCI), in Abuja, on Tuesday.

    Represented by Director of Enterprise Risk Management, NDIC, Peter Hyelamzha, the NDIC helmsman, said the corporation has made a 100 per cent and final liquidation dividends to depositors of the defunct Eagle and Financial Merchant Banks (in-liquidation) which increased the number of banks for which a final dividend of 100 per cent had been declared to 16 in 2017.

    He said NDIC, in collaboration with the Central Bank of Nigeria (CBN) conducted an on-site and off-site supervisions of 25 Deposit Money Banks (DMBs) and one Non-Interest bank (NIBs).

    The supervision, he said, was extended to 1,008 Micro Finance banks (MFBs) and 38 Primary Mortgage Banks (PMBs) using the Risk Based Supervision (RBS) approach and Consolidated Risk Based Examination of three banks with Holding companies in a bid to ensure financial system stability in the country.

    He said: “The Corporation continued to make strenuous efforts in its debt recovery drive even in the face of all odds. Total recoveries from debtors of failed banks by the NDIC in 2017 amounted to N368.43 million which brought cumulative recovery from debtors to N28.84 billion.

    “Similarly, the sum of N207.45 million was realised from the disposal of physical assets of closed banks. Thus, the cumulative sum of N21.85 billion was realized from the disposal of physical assets of closed banks as at 31st December, 2017. The funds realized was used to pay liquidation dividends to the uninsured depositors of closed banks.”

    “Presently each depositor of Deposit Money Banks (DMBs), Noninterest Banks (NIBs) and Primary Mortgage Banks (PMBs) is insured up to a maximum limit of N500, 000; while the maximum insured coverage for depositors of Micro Finance Banks (MFBs) is N200, 000.

    “However it is important to also stress that depositors who have funds in excess of the insured limits are paid dividends from the liquidation of failed banks depending on the quality of their assets and the outcome of debt recoveries by the Corporation.

  • NDIC seeks new measures in tackling financial crisis

    The Nigeria Deposit Insurance Corporation (NDIC) has called on regulators to take measures  that ensure early detection of financial crisis.

    He spoke at the International Association of Deposit Insurers  (IADI) Africa Regional Committee (ARC) workshop held in Lagos with the theme: Financial Stability, System-Wide Crisis Preparedness and Effective Bank Resolution.

    Ibrahim, who is the new Chairman of the body, said the fabric of the global financial stability is threatened by  monetary policy normalisation in some notable economies, which may result into sharp volatility and disruptions in financial markets.

    Other crisis include proliferation of digital currency such as Bitcoin as well as the activities of Fintech in general. These, he said,  have the tendency to jeopardize the efficacy of safety-met arrangement and prudential roles of the traditional banking system such that it becomes available to a smaller segment of the banking system.

    “Rising exposure of emerging markets to reversal of foreign portfolio inflows and US Dollar appreciation with the growing risk of protectionism and ongoing trade wars between the United States and the rest of the world- China,North America and Europe- could degenerate with negative implications for the global financial system stability”, he added.

    He said through the failure resolution mechanisms of NDIC, it had so far closed 52 deposit money banks (DMB) out of which 49 are currently in liquidation while the remaining are involved in litigations challenging the revocation of their licence by the CBN.

    Ibrahim said: “In the case of other deposit taking financial institutions, a total of 187 Microfinance banks (MFBs) and 42 Primary Mortgage Banks (PMBs) are currently in liquidation.”

    IADI Secretary General, David Walker said according to the International Monetary Fund  (IMF), there have been 124 financial crisis in the world since 1970.

  • NDIC builds capacity for Uganda DPFU

    The Nigeria Deposit Insurance Corporation (NDIC) is assisting the Uganda Deposit Protection Fund (DPFU) to develop capacity for the implementation of the Deposit Insurance System (DIS) in the East African country.

    The corporation recently hosted a five-member delegation from DPFU who arrived the country to understudy the activities of the corporation.

    The NDIC has been the destination of choice for several sister agencies and Central Banks from across the African continent eager to understudy the activities of the Corporation and learn from its rich experience in Deposit Insurance – a subject on which it is recognized as a leader in Africa.

    The Ugandan team was only the latest delegation from several Africa countries to visit the Corporation for capacity building.

    The NDIC previously hosted delegations from the Reserve Bank of Malawi, Reserve Bank of Lesotho, Deposit Protection Fund Board of Kenya, Deposit Insurance Board of Tanzania, Commission Bancaire del’Afrique Centrale (COBAC) of Cameroun, Delegates from Banque Centrale Des Etats De L’ Afrique De L’ Ouest (BCEAO) in Senegal all of whom the NDIC assisted build the capacity for the implementation of the Deposit Insurance System (DIS) in their various jurisdictions.

    Others include teams from the Central Bank of The Gambia, Bank of Tanzania, the Deposit Protection Corporation of Zimbabwe, and the Ghana Deposit Protection Corporation (GDPC). In September, 2018, the NDIC will also host the African Regional Conference of the International Association of Deposit Insurers (IADI).