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Depositors of failed banks get N1.39bn from NDIC

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Lagos, Nov. 10, 2023: The Nigeria Deposit Insurance Corporation (NDIC) has paid N1.39 billion to 36,163 depositors of 110 closed Microfinance Banks (MFBs) and three Primary Mortgage Banks (PMBs).

The Managing Director of NDIC, Mr Bello Hassan, made the disclosure at the NDIC Special Day, at the 2023 Lagos International Trade Fair, on Thursday in Lagos.

The fair has the theme: “Connecting Businesses, Creating Value.”

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.

This, he said, followed the recent revocation of licenses of some MFBs and PMBs by the Central Bank of Nigeria .

He said the payments of the statutory insured sums were still ongoing.

Hassan explained that depositors with funds exceeding the insured limit would receive liquidation dividends after the recovery of debts and the sale of the closed banks’ physical assets.

“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, represented by Mr Nuhu Bashir, Director, Corporate Communications, NDIC, urged the general public, especially traders and businessmen, to always ensure that their funds were saved in licensed banks.

He advised them to avoid patronage of wonder banks and Ponzi schemes which always leave their victims with untold stories.

The boss added that the corporation was actively working to investigate and resolve any wrong doing or complaints that it receives about insured banks.

“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 with their respective insured institutions.

“In this regards, the corporation operates a 24-hour toll-free Helpdesk line (080063424357) and an email (helpdesk@ndic.gov.ng) for depositors to put forward their inquiries on the benefits and operations of Deposit Insurance Scheme in Nigeria,” he said.

Earlier, the President of the Lagos Chamber of Commerce and Industry, Dr Michael Olawale-Cole, thanked the corporation for being a worthy partner of the LCCI over the years.

Olawale-Cole, represented by Bimbo Olasore, the Vice Chairman, Trade Promotion Board, also congratulated NDIC for using its platform to reach out to bank depositors and showcased their products.

“As you all are aware, the Lagos International Trade Fair is the biggest and the most vibrant fair in the whole of West Africa. So, it is a very useful platform for people to use and advertise their goods and services.

“I’m very pleased in this case that NDIC is using it, in that if the customers are not coming to their offices, they will go to where the depositors are congregating.

“I can assure you that you being here for the 10 days, that you would meet tens of thousands of depositors of NDIC.

NDIC

NDIC assures defunct banks’ depositors of prompt refund

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The Nigeria Deposit Insurance Corporation (NDIC) has assured depositors of the closed banks of speedy payment of their insured sums.

The assurance followed the revocation of licences of 179 microfinance banks and four Primary Mortgage Banks by the Central Bank of Nigeria.

The Managing Director of NDIC, Mr Bello Hassan, gave this assurance in a statement after the revocation of licences of the affected MFBs and PMBs by the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele.

In the statement signed by the Director, Communication & Public Affairs Department, NDIC, Bashir Nuhu, the NDIC boss stated that the insured deposit was the first claim that the corporation paid to depositors upon revocation of bank’s licence by the CBN.

He added that, maximum specified limits for the MFB and PMB sub-sectors are N200,000 and N500,000 per depositor per bank, respectively.

As liquidator, the managing director said, “The corporation has also put machinery in motion to commence sales of assets of the defunct banks as well as recover debts owed to them in order to declare liquidation dividends on pro rata basis to the affected depositors with claims exceeding the maximum insured sums of N200,000 for MFBs and N500,000 for PMBs.”

He assured that regulatory authorities were leaving no stone unturned to ensure that the soundness of the banking system was not compromised, and that there was no need for the public to panic over the safety of their bank deposits.

Hassan said, as deposit insurer, the NDIC would begin the process of payment of the insured sums immediately with the verification of eligible depositors at the respective premises of the closed banks.

He urged such depositors to get the required documents for the exercise such as proof of account ownership, verifiable means of identification and alternate bank account to facilitate their seamless verification and payment of their insured deposits.

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NDIC declares 100% dividend to pay depositors of 20 liquidated banks

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Mr Bello Hassan, Managing Director, Nigeria Deposit Insurance Corporation (NDIC), said the corporation in September, declared 100 per cent liquidation dividend in 20 institutions.

The dividends were in respect of the 49 Deposit Money Banks (DMBs) in-liquidation.

Hassan made the disclosure at 2022 NDIC workshop, organised for the Finance Correspondents Association of Nigeria (FICAN) and Business Editors, on Monday in Port Harcourt.

He said that the corporation had realised enough funds from its assets to fully pay all depositors of the listed banks.

The three-day workshop, which was its 19th edition, had “Boosting Depositors Confidence Amidst Emerging Issues and Challenges in the Banking System,” as theme.

Hassan noted that the corporation had cumulatively paid ₦11.83 billion to more than 443,949 insured depositors and ₦101.37 billion to uninsured depositors of all categories of banks in-liquidation, as at June.

“The NDIC bank liquidation mandate entails reimbursement of insured and uninsured depositors, creditors, and shareholders of banks in- liquidation.

“The liquidation activities, as at June 30, 2022, covered a total of 467 insured financial institutions in in-liquidation, comprising 49 DMBs, 367 MFBs, and 51 PMBs,” he said.

The NDIC boss said that the corporation had also provided deposit insurance coverage to a total of 981 insured financial institutions.

He named the financial institutions insured to be 33 DMBs made up of 24 Commercial Banks, six Merchant Banks and three Non-Interest Banks (NIBs) plus two Non-Interest Windows; 882 Microfinance Banks (MFBs); 34 Primary Mortgage Banks (PMBs); 3 Payment Service Banks (PSBs) and 29 Mobile Money Operators.

The NDIC boss said that the corporation had in May, developed and deployed the Single Customer View (SCV) platform for the Microfinance and Primary Mortgage Banks, to strengthen its processes and procedure for data collection.

He explained that the platform would not only ensure availability of quality, timely and complete data to the NDIC, but would eliminate delays often experienced in reimbursing depositors, following revocation of institutions’ licences by the CBN.

He said that the final phase of the implementation of the SCV for Deposit Money Banks (DMBs) would be achieved through the incorporation of the SCV template as part of the on-going Integrated Regulatory Solution (IRS) jointly being developed with the CBN.

On consumer protection, the NDIC boss said the corporation had strengthened its complaints resolution platforms, which included the Toll-Free Help Desk, social media handles and Complaints Desks in the Bank Examination.

Other strengthened platforms are Special Insured Institutions and Claims Resolutions Departments, and the Zonal Offices, to receive and process complaints from depositors.

He commended stakeholders and reiterated that the landmark achievements of the corporation and others, would not have been possible, without their active support.

Zainab-Ahmed-Finance-Minister

Depositor protection, critical for maintaining, restoring financial stability –Minister

Dr Zainab Ahmed, the Minister of Finance, Budget and National Planning says depositors’ protection is a critical element for maintaining and restoring financial stability in Nigeria.

Ahmed said this at the 2022 International Association of Deposit Insurers (IADI) Africa Regional Committee (ARC) workshop hosted by the Nigeria Deposit Insurance Corporation (NDIC) in Abuja on Tuesday.

She said the country’s economy had felt the brunt of the global economic distortion, having gone into recession twice in the space of five years.

According to her, we make bold to say that in spite these economic challenges, no depositors’ fund was lost given the effectiveness of our agencies, especially the Central Bank of Nigeria (CBN) and NDIC.

Ahmed said the theme of the workshop ‘Normality in Turbulent Periods: The Stabilising Role of Deposit Insurance’, was pertinent due to recent socio-economic challenges that had continued to undermine the safety and stability of the financial system.

“The negative impact of these challenges on economic growth and financial sector stability raised a number of questions concerning the role of Deposit Insurance System (DIS) in contributing to financial system stability.

“It has equally demonstrated the important role played by the DIS, as a component of financial safety-net arrangements in most jurisdictions across the globe.

“Depositor protection is a critical element necessary for maintaining and restoring financial stability,’’ she said.

The CBN Governor, Mr Godwin Emefiele, said the secret to the sustained financial stability in the country was the smooth coordination among these safety net participants like the NDIC and others.

Emefiele said the rapid evolution of financial technologies had continued to alter the financial landscape across the globe.

“This development has continued to disrupt traditional ways of financial services banking landscape and this can be sometimes disturbing.

“That is why we the regulator must guard our loins to ensure that we put in place strong regulations, framework and practices that should help nip in the board unfortunate incidences,’’ he said.

Emefiele charged IADI to increase its advocacy to other African countries to ensure effective financial system stability in the continent.

Mr Bello Hassan, the Managing Director of NDIC, said the 2007 to 2009 global financial crisis and the COVID-19 pandemic exposed the increasing relevance of deposit insurance in stabilising turbulent banking systems.

He said the crises led to review of some of design features of explicit deposit insurance system in many countries to accommodate emerging developments in the domestic and global financial system.

Hassan said the workshop created a veritable platform for knowledge and experience-sharing in fulfilling the vision and mission of IADI.

“I am optimistic that at the end of this workshop, strategies for system-wide crisis preparedness and resolution options in promoting financial stability in the region would emerge.

“The NDIC as one of the resolution authorities in Nigeria has adopted different resolution mechanisms in resolving the failure of distressed deposit-taking financial institutions in the country,’’ he said.

Mr Mohamud Mohamud, the IADI-ARC Chairman, urged African countries to be at the fore-front of embracing financial technology.

Mohamud re-emphasised that deposit insurance was a key component of ensuring financial system stability.

Mr David Walker, the Secretary-General of IADI, called on deposit insurers to focus on emerging risks and make their cooperative window active.

The four-day workshop attracted managers of various deposit insurance agencies from different IADI member countries.