A former Director-General of the Nigerian Stock Exchange, Prof. Ndi Okereke-Onyiuke, has called on the Federal Government to merge the Nigeria Deposit Insurance Corporation with the Asset Management Corporation of Nigeria. She said the NDIC was at the moment inefficient and lacked the capacity to be a true insurer of the Deposit Money Banks in the country.
Okereke-Onyiuke said this on Wednesday in Lagos at the launch of a book, Inside Nigerian Banks written by Mr. Nik Ogbulie the Editor of Business World Newspaper, adding that if the NDIC was efficient, there would not have been the need to create AMCON in the first place. According to her, sustaining both institutions is wasteful as they have similar mandates. I agree with the chairman of the event (Tilijie), that the NDIC should be scrapped, however, I am bridging that by adding that scrapping it means nothing because AMCON will do the same thing as NDIC, she noted.
She lamented that the government does not have a good understanding of how the finance sector operates. The former NSE boss said the government was gradually killing the banking industry as the NDIC and AMCON were not getting adequate funding from the government, but relied on the banks for resources. Okereke-Onyiuke said, The NDIC and AMCON are taking so much money from the banks. Depositors are getting less returns on their deposits as a result of this.
They are being funded by the banks using depositors funds. Keeping both institutions is a waste of time, money and human resources. They should be merged and made to work. According to her, as an institution, the NDIC has not been able to create wealth, but rather spends what is generated by the public, we don’t need NDIC anymore, it is dead.
She further noted that the merger of both NDIC and AMCON would create effectiveness in the sector, while also protecting the monies of Nigerians in the banks. She added: NDIC and AMCON can do the work effectively. After the merger, practicing bankers should be brought onboard to work together. There should be reduction of staff and those available should be given the power to work. This will save Nigeria a lot of money. We have to build institutions for government to create wealth. People just go to government to waste money. During our time in the capital market, we created wealth for government.
Earlier, a former Managing Director of the defunct Fortune Bank and current Delta State Commissioner for Water Resources Development, Mr. Fidelis Tilije, described the NDIC as inefficient. He called for the scrapping of the corporation, saying its existence amounted to duplication of duties since its functions had already been taken over by AMCON.
The NDIC is funded by banks the same way AMCON is also being funded by the banks. But the NDIC won’t do anything when depositors are in trouble. It will be nowhere to be found, while AMCON is solely responsible for the recovery of debts from debtors. So, the NDIC should be scrapped, he stressed.
But in defending NDIC, Mr Jibril Aku, the Group Head, Strategy, Ecobank Transnational Incorported (ETI), said NDIC is not a resolution mechanism for banking credit. He added: If there is a problem, NDIC doesn’t have the enabling environment that AMCON has. AMCON has legislation backing it up that allows the CBN governor to inject some money into the system. We pay 5 per cent of total assets to AMCON fund every year. These resolutions mechanisms are not available to NDIC.
Okereke-Onyiuke, who donated some copies of the book to universities across the federation, appealed to stakeholders in the education sector to ensure that more copies of the book are available to libraries in tertiary institutions, including the national library.