We Secured N949bn Depositors’ Funds In Failed Skye Bank – NDIC

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BY COBHAM NSA, BENIN – The Nigeria Deposit Insurance Corporation (NDIC) says its timely intervention in the failed Skye Bank saved depositors from losing funds totaling about N949.6 billion in the system.

According to the Corporation, aside deploying the ‘Bridge Bank Option’ to perform this great feat, over 6,000 jobs across the failed bank’s 277 branches were also protected in the nation’s financial sector.

Managing Director and Chief Executive of the Corporation, Alhaji Umaru Ibrahim gave the figure at this year’s workshop for Business Editors and Finance Correspondents in Benin, Edo State with the theme: “Financial Inclusion, Consumer Protection and Evolution of Virtuaid al Currencies In Nigeria’.

He said NDIC will not relent in delivering on its statutory mandate of safeguarding depositors’ funds in the face of emerging issues dotting the global financial services industry.

Ibrahim, represented by the Director, Insurance and Surveillance Department, NDIC, Alhaji Mohammed Y Umar, said these huge deposits would have been at serious risk if the bank was allowed to finally collapse.

He noted that among disturbing developments in the financial industry are the proliferation of financial technology (FinTech); digital and mobile banking; evolution of digital currencies; financial consumer protection; financial inclusion; and cyber crimes

The NDIC boss said; “Customer protection and financial inclusion as impacted by Fintech is now a global issue”, adding; “Another issue worthy of mention is cyber-crime resulting from the rapidly evolving complexities in technology.”

He however acknowledged that the changing landscape of Nigeria’s financial sector has brought to fruition the broadening dimension of Mobile Money Operators (MMOs) for sustainable economic growth and development in the country.

On the status of the 154 MfBs and six PMBs whose licences were recently revoked by the Central Bank of Nigeria (CBN), the NDIC boss said: “The CBN recently revoked the licences of 154 MFBs, and six Primary Mortgage Banks, 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 licences were issued for a continuous period of more than six months while others had gone into voluntary liquidation.”

Assuring depositors of speedy resolutions of all outstanding issues, Ibrahim stated that; “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.”

He said from available records, majority of the depositors, especially in the MFBs, have less than N200,000 in their accounts, and this presents a situation where the Corporation will hopefully cover 100 per cent of the affected depositors.

He said the NDIC would sustain its strong collaboration with CBN to ensure effective supervision of DMBs for strict adherence to rules and regulations guiding banking operations in the country.

Ibrahim said the aim is to protect banks’ depositors against fragrant abuse of the extant rules by management of financial institutions as well as mitigating recurring incidents of insiders abuses, weak internal control and overall non-compliance to prudential guidelines.

On its regulatory and supervisory interventions, he said NDIC remains committed to safeguard depositors’ funds at all cost.

On September 22, 2018, NDIC sent board and management of Skye Bank packing, changed the management team and re-named it Polaris Bank, adopting the option of bridge bank liquidation.

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