NDIC Intensifies Efforts to Recover N400 Billion Loans from Failed Banks, Eyes Increased Deposit Insurance Compensation

In an effort to strengthen the stability of Nigeria’s financial sector, the Nigeria Deposit Insurance Corporation (NDIC) has announced strategic plans to recover over N400 billion from loans granted by liquidated deposit money banks.

Managing Director of NDIC, Bello Hassan, disclosed the corporation’s commitment to expediting the recovery process by collaborating with anti-graft agencies and the judiciary. Hassan stressed that the payment of depositors from the liquidated banks is a non-negotiable priority.

Speaking at the 20th edition of the NDIC Finance Correspondents Association of Nigeria (FICAN) Workshop in Owerri, Imo State, Hassan highlighted the challenges the NDIC faces in debt recovery. He emphasized that many customers who borrowed from banks in liquidation are unwilling to repay their debts, hindering the NDIC’s ability to fulfill its obligations to depositors.

“I want to put it on record that those debts, although those loans that were granted were granted out of deposits of people that were collected in the banks, so it is only when those debtors pay back that NDIC will now be able to pay the depositors of those failed banks.”

He noted that over N1.6 billion has been paid to over 40,000 depositors of the recently liquidated banks, stressing that NDIC is measuring up to its responsibilities to Nigerian depositors.

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.

Meanwhile, the NDIC is also gearing up for an overhaul of its deposit insurance coverage. Hassan revealed that plans are at an advanced stage to review the maximum deposit insurance coverage to align with the impact of macroeconomic developments since the last review.

Although the specific new coverage level was not disclosed, Hassan noted that its approval would significantly reinforce depositors’ confidence in the NDIC’s deposit guarantee scheme.

“It is our belief that the new  coverage  level  once  approved  will  go  a  long  way  in  reinforcing depositors’ confidence on the NDIC’s deposit guarantee scheme. ”

As the deposit insurer, the NDIC currently guarantees payments of up to N500,000 to a depositor in Deposit Money Banks (DMBs) and Primary Mortgage Banks (PMBs), and N200,000 to a depositor in Microfinance Banks (MFBs) in the event of a participating financial institution’s failure.

Hassan also highlighted the introduction of the Single Customer View (SCV) framework, which enhances the speedy payment of insured sums to depositors of closed banks. The NDIC has fostered collaboration with the legal sector to facilitate the swift dispensation of justice and informed judgments on failed bank cases.

“We have also enhanced collaboration with the bar and the bench, leading to speedy dispensation of justice and more informed judgments on failed banks cases.”

Experts in the financial sector say these efforts by the NDIC reflect a commitment to securing the interests of depositors, ensuring financial stability, and addressing challenges in debt recovery within the Nigerian banking landscape.

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