The managing director of Nigerian Deposit Insurance Corporation (NDIC), Mr Bello Hassan has reaffirmed the commitments of the corporation towards recovering debt owed to failed banks which are now under liquidation.
He disclosed this at the opening ceremony of the 20th workshop for Business Editors and Finance Correspondents Association of Nigeria (FICAN), with the theme: “Stocktaking of Deposit Insurance Practice: Assessing the Now, Evaluating the Challenges and Forecasting the Future” in Owerri, Imo State.
The NDIC boss said they are making effort to recover over N400 billion owned by debtors of failed banks and are prepared to wield the big stick, because debt recovery remained one of the greatest challenges hindering its deposit insurance operation.
This includes, Deposit Money Banks (DMBs), Microfinance Banks (MFBs), and Primary Mortgage Institutions (PMIs), however pointed out that a substantial recovery had been made, while affected depositors had also been paid accordingly.
He said the corporation will leverage a bouquet of powers in its disposal, courtesy of the revised NDIC Act, 2023 to expedite the process of debt recovery, moving forward. According to him “A lot of customers of banks in liquidation that borrowed are not willing to repay those debts. And I want to put it on record that those debts or those loans that were granted were granted out of deposits of people that were collected by the banks.
Adding that it is only when those debtors pay back that the NDIC would now be able to pay the depositors of those failed banks and that is one of the great challenges that we’re facing. Noting that ,luckily enough, there is a review in the 2023 NDIC Act, a lot of powers have been given to the corporation in order to expedite this process. We are hoping to leverage that to ensure that we recover more so that we can pay those depositors.”
He said substantial payments of the insured amounts had also been paid to depositors of banks whose licences were recently revoked earlier in May by the Central Bank of Nigeria (CBN). Pointing out that over N1.6 billion had been disbursed to 40,000 depositors while further calling on other depositors who didn’t have a Bank Verification Number (BVN) attached to their bank accounts to come forward and be verified in order to access their insured deposits.
Bello Hassan further explained that in complementing the consumer protection efforts of the CBN, “we have enhanced public awareness on the benefits and limitations of the deposit insurance system and financial literacy, to reduce the rate at which small depositors are being defrauded, thereby enhancing confidence in the banking system; we have invigorated our liquidation activities, and greatly increased debt recovery rate leading to declaration of 100 per cent liquidation dividends to depositors of over 20 deposit money banks in liquidation; and we have also improved our systems, processes and procedures to promote transparency and accountability in our operations, amongst other humble achievements”.