NDIC Takes Stock On Deposit Insurance, Strategises On Preventing Bank Failure

NDIC's Managing Director/Chief Executive Officer NDIC, Bello Hassan fielding questions from newsmen in Owerri

Prudence Eboagwu-Ijah

The Nigeria Deposit Insurance Corporation (NDIC) has reinstated her commitment to strengthen the banks through prudential thresholds and other regulatory instruments.  

Thereby resolving to uphold collaboration with all stakeholders in the financial sector and the media to address bank failure in Nigeria.  

The Managing Director/Chief Executive Officer NDIC, Bello Hassan disclosed this on Wednesday in Owerri, Imo State, at the opening ceremony of the 20th edition of the workshop which had Business Editors and Financial Correspondents and other stakeholders in the financial system in attendance.

Hassan stated that decades of collaboration between the Corporation and the media has greatly sustained capacity building in the field of Deposit Insurance System (DIS) in particular, and the financial system in general.

 The 2023 workshop with the theme: “Stocktaking of Deposit Insurance Practice: Assessing the Past, Evaluating the Present and Forecasting the Future”.

While taking stock of key deposit insurance practices by his management, he disclosed that great emphasis is been placed on “scaling up the deposit insurance framework; provision of timely support to insured institutions as and when required; ensure faster and orderly resolutions of liquidated insured institutions; as well as assist the monetary authority in promoting the stability of the banking system”.

“I am glad to report that our commitment in this regard has not gone without yielding the desired results. 

We have introduced the Single Customer View (SCV) framework that has enhanced speedy payment of insured sums to depositors of closed banks; we have enhanced collaboration with the bar and the bench, leading to speedy dispensation of justice and more informed judgements on failed banks cases; we have equally put in place policy and framework on Alternative Dispute Resolution for out-of-court settlement, which had enabled us to resolve some hitherto protracted failed bank litigations; we have reviewed the Framework for Differential Premium Assessment System (DPAS) to make it more risk sensitive and account for significant developments that have taken place in the Nigerian banking system since its adoption in 2008; and we have established a special desk at the Economic and Financial Crimes Commission (EFCC) which has energized investigation and prosecution of parties responsible for failure of banks. 

Against this backdrop, NDIC’s helmsman added that it is recovering over N400 billion from debtors of liquidated banks in the country as substantial payments have been made to over 40,000 depositors of the banks in liquidation.

“The value of the debt that we are about to recover, if you take into account all the banks in liquidation that is the Deposit Money Banks (DMBs), the microfinance banks, the primary mortgage institutions, is well beyond N400 billion, and that is what we are expecting to recover so that we can pay depositors of those banks in liquidation.

“One of the greatest challenges that NDIC is facing, is that of debt recovery; alot of customers of banks in liquidation that borrowed are not willing to repay those debts. And I want to put it on record that those loans were granted out of deposits of people that were collected in the banks”.

Hassan further disclosed that more than N1.6 billion has so far been paid out, adding that the amount paid out would have been more if depositors of the liquidated banks had come forward.

“With the revision of the 2023 NDIC Act, a lot of powers have been given to the Corporation in order to expedite this process. So, we are hoping to leverage that to ensure that we recover more, so that we can pay those depositors.

The Managing Director further pleaded with the Federal government and other relevant stakeholders to assist in ensuring speedy recovery of the debts.

“No doubt there’s a regulation in place, the CBN is there , they have regulation and supervision to ensure that banks abide by the laws and regulations and it’s the basis of the licence they have so I believe as we strengthen that process, the risk of failure is going to be reduced to the barest minimum.

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