- Recovers N29.542bn from failed banks’ debtors
BY COBHAM NSA, ABUJA – The Nigeria Deposit Insurance Corporation (NDIC) is excited by the huge gains and security enjoyed by the nation’s banking industry through the bridge bank initiative.
According to the Corporation, by this initiative, which is in collaboration with the Central Bank of Nigeria (CBN), over N1.759 trillion of depositors funds have remained protected and secured to date.
This is as the Corporation also disclosed that a cumulative amount of over N29.542 billion has been recovered from debtors of Deposit Money Banks (DMBs) in-liquidation; failed Micro-Finance Banks (MFBs); and Primary Mortgage Banks (PMBs).
The breakdown showed that through its recovery of debts and realization of assets of closed banks efforts, the NDIC got over N29.112 billion from DMBs; N129.10 million from MFBs; and N300 million from PMBs.
Speaking at a media briefing to mark the Corporation’s 30th Anniversary celebration in Abuja, Managing Director and Chief Executive, Alhaji Umaru Ibrahim, said in discharging its mandate, the Bridge Bank mechanism was effectively deployed in year 2011 to resolve the crisis involving three (3) failed Deposit Money Banks (DMBs), Afribank, Spring Bank and Bank PHB.
He further explained that the same mechanism was similarly adopted in 2018 to resolve the Skye Bank Plc liquidation crisis.
Ibrahim, who was represented by the Director of Communication & Public Affair, Mr. Sunday Oluyemi, said; “The bridge bank initiative safeguarded 12,667 jobs, protected deposit liabilities of over N1.759 trillion which ensured that depositors had uninterrupted access to their funds, and prevented the systemic repercussions of the failure of the bank on the entire financial system.”
“The Bridge bank option engendered macro-economic stability, sustained daily operations of the failed banks including meeting maturing obligations and enhanced the confidence of depositors and other stakeholders”.
The NDIC Chief Executive also stated that the Corporation, has since its inception, “successfully responded to economic realities and yearnings of depositors by periodically increasing the Maximum Deposit Insurance Coverage to enhance the confidence of the public in the Nigerian financial system. On average, this is done every five years in line with Global best practice.”
He disclosed that; “To date, the NDIC has paid a cumulative sum of over N8.25 billion as insured amount to 442,999 depositors of closed DMBs; paid over N2.97 billion to 83,415 depositors of closed Microfinance Banks (MFBs), and over N70.53 million was paid to 869 depositors of closed Primary Mortgage Banks (PMBs)”
He said in pursuit of its mandate to ensure depositors of liquidated banks do not suffer losses or pains, 53 DMBs, 325 MFBs and 51 PMBs have been put under liquidation without disruption to the nation’s payment system from 1994 to date
On debts and assets recovery, the NDIC boss said; “On realisation of assets, currently N21.502 billion was collected from the disposal of physical assets of closed DMBs, while N404.74 million and N78.17 million were realised in respect of MFBs and PMBs, respectively.
“Debt collection and assets sales culminated in the payments of over N116.258 billion as Liquidation Dividends to depositors, creditors and shareholders of closed DMBs, MFBs and PMBs as at today.”
Alhaji Ibrahim said; “through sustained and diligent liquidation activities, NDIC has realised assets to pay in full, deposits of the customers of 17 of the DMBs (In-liquidation). In effect, all the depositors of the 17 defunct banks who came forward to file their claims have been paid all their monies (both insured and uninsured) erstwhile trapped in those banks”.
On the Corporation’s response to contemporary developments in the banking industry, Ibrahim said in collaboration with the CBN, the NDIC is funding the establishment of National Association of MFBs Unified Information Technology (NAMBUIT) for MFBs Digital Financial Services.
He said the past 30 years has seen NDIC exhibiting a strong determination and resolve to maintain high level professionalism and excellence in its operations, adding; “The Corporation had gone through a series of structural and operational reforms necessary to align its activities with global best practices.”
Acknowledging that the development has given NDIC the right impetus to realize its mandate, the NDIC boss said; “With the reforms, the Corporation has been able to institute systems, processes and procedures that makes it operationally ready to effectively discharge its mandate”.
