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NDIC educates MSMEs against investment in Ponzi schemes

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The Nigeria Deposit Insurance Corporation (NDIC) on Thursday educated operators of Micro, Small and Medium Scale Enterprises (MSMES) at the ongoing 2021 Edo Trade Fair in Benin on the dangers of investing in Ponzi schemes.

Mr Bello Hassan, Managing Director/Chief Executive, NDIC, said that Ponzi schemes and illegal fund managers were not licensed by the Central Bank of Nigeria (CBN)  as deposit taking institutions and as such not covered by the NDIC deposit insurance.

“MSMEs should be careful when operators of Ponzi schemes promise to give them mouth-watering investment opportunities.

“Don’t listen to them and don’t invest your money in their activities because they are not insured by NDIC and you can’t get your money back when they fold up,” he said.

Hassan, represented by Mr Udofot Ukpong, Senior Manager NDIC Benin Zonal office, said that the corporation was focused on the protection of depositors especially small and less sophisticated ones against the risk of investment failure.

He said “The corporation makes use of trade fairs to promote financial literacy among inclusion among all segments of the populace depositors and other stakeholders.

“NDIC has continued to strive for a sound, safe and stable financial system which is pivotal for sustainable economic growth.”

He commended organisers of the fair, saying it had provided a platform for MSMEs to show case their products and services as well as explore opportunities for expansion.

In her remarks, Mrs Aina Omo-Ojeonu, President of the Benin Chamber of Commerce, Industry, Mines and Agriculture, commended NDIC for the public enlightenment on its activities.

“Before now a lot of people did not know what NDIC was about, but your presence has changed the narrative.

“It makes us confident that there is an organisation that is taking care of our money in the deposit money banks,” Omo-Ojeonu said.

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NDIC gives hope to depositors in event of failure of banks

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Mr Bello Hassan, Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), has assured depositors that in the event of failure of a bank, above 97 per cent of depositors would be fully covered by the Corporation.

Hassan gave the assurance at the 2021 FICAN Workshop organised by NDIC for Finance Correspondents and Business Editors on Tuesday in Gombe.

The workshop, the 19th edition, has “Enduring Extreme Disruption: Resilience and Reinvention for Banking System Stability and Deposit Insurance ” as theme.

Hassan said that the corporation’s total number of accounts in the deposit money banks in 2016, 2017, 2018 and 2019, stood at 83.0 million; 99.1million; 112.0 million and 128.4 million respectively.

According to him, out of these numbers, the N500,000 coverage limit fully covered 99.4per cent; 97.6per cent; 97.5 per cent and 97.6per cent of accounts, respectively.

” What these figures entail is that only less than three per cent of accounts/depositors are not fully covered by the prevailing coverage limits.

“The implication of this is that in the event of failure of a bank, above 97per cent of depositors would be fully covered by the Corporation.

“From the foregoing statistics, it could be observed that the Corporation’s deposit insurance coverage limits are not only adequate but robust enough to engender confidence in our banking system,” he said.

The Managing director said also that the Corporation’s maximum coverage limits remained the most adequate and robust in the world.

“We urge the media through this forum to make Nigerian depositors aware that the NDIC’s maximum coverage limits of N500,000.00 per depositor per commercial, merchant and, non-interest bank, primary mortgage bank and mobile money operator, as well as N200,000.00 per depositor per microfinance bank remain the most adequate and robust in the world.

“I need to reiterate that, as it is today, these limits are not only adequate, they are also consistent with the extant provisions and recommendations of the International Association of Deposit Insurers (IADI) in its Core Principle for Effective Deposit Insurance System on the determination of coverage limits.

“The IADI Core Principle No. 8 on coverage limits specifically requires that the thresholds should be limited, credible with the capacity to fully cover substantial majority of bank depositors while the rest remain exposed to ensure market discipline,” he said.

Besides, Hassan advocated that the corporation be efficiently empowered to be able to recover assets as expeditiously as possible, so they could pay the depositors

“There are a lot of areas that I think the NDIC Act needs to be amended. NDIC, we are liquidators and what happens is that at the point of liquidation, we try to recover the assets, especially the loans and advances that were granted by those banks that are in liquidation.

“One of the challenges that we are facing is slow recovery and if the act is to be amended, I think it is important that the corporation is efficiently empowered to be able to recover those assets as expeditiously as possible so they can pay the depositors,” he maintained.

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NDIC seeks FCT’s support in recovering assets of closed banks

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The Nigeria Deposit Insurance Corporation (NDIC) has solicited the support of the Ministry of Federal Capital Territory (FCT) in recovering the landed properties of banks in liquidation with the territory.

A statement by Mr Bashir Nuhu, the Director, Communication and Public Affairs Department of the Corporation said the Chairman of the NDIC Board of Directors, Mrs Ronke Sokefun, made the appeal when the management of the board visited Malam Mohammed Bello, the FCT Minister in Abuja.

The statement quoted Sokefun, as saying that, the move was to enable the corporation to pay depositors of affected closed banks.

She said the corporation had faced bottlenecks in the full payment of trapped depositors’ funds as a result of the difficulty in recovering assets of banks in-liquidation.

According to her, the difficulties are due to poor documentation by the banks, revocation of title by authorities and litigations over the assets.

“Some of these assets are located in the FCT so, the support of the Ministry in realising the properties would assist the corporation in the discharge of its mandate of deposit guarantee,’’ she said.

It also quoted the Managing Director of the corporation, Mr Bello Hassan, as highlighting the roles of the NDIC and the Asset Management Corporation of Nigeria (AMCON) in the management of banks’ assets.

Hassan said the NDIC as a liquidator focused on the assets of closed banks following revocation of their licences by the CBN while AMCON was involved with Non-Performing Loans of an existing bank.

The Minister, according to Nuhu, said the ministry was willing to assist the corporation in resolving issues around its properties and those of banks in-liquidation within the ambit of the law.

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NDIC proposes African centre for deposit insurance

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Nigeria Deposit Insurance Corporation (NDIC) is proposing the establishment of the African Centre for Deposit Insurance (ACDI) to be domiciled in the NDIC Academy, Abuja.

The proposal has been hailed by the International Association of Deposit Insurers (IADI).

When fully operational, the Centre will provide training and enhance the capacity for the staff of member countries on the continent.

In a statement by NDIC Director of Communications and Public Affairs, Bashir A. Nuhu, the commendation was given during the Annual General Meeting of the IADI Africa Regional Committee (ARC) on Tuesday, chaired by the ARC Chairperson and NDIC MD/CE Umaru Ibrahim.

The meeting which was held online had representatives of Nine (9) member countries of ARC (Angola, Ghana, Kenya, Morocco, Nigeria, Rwanda, Tunisia, Uganda and Zimbabwe) as well as the IADI Secretary General, Mr. David Walker and Mr. Keehyun Park of the IADI Secretariat Basel, Switzerland.

While praising the NDIC for its efforts to spearhead the establishment of the Centre, members agreed that due to the current Covid-19 pandemic restrictions, the Centre should commence with online programmes in 2021.

Members also commended the proposed ARC Publication which is designed to document the experiences and challenges of Deposit Insurance System (DIS) in Africa.

They also agreed to set up of a Committee made up of Nigeria, Zimbabwe, Kenya and Morocco to coordinate the collation of information from member countries to be used in the compilation of the publication.