…to strengthen collaboration with CBN on banks supervision
By Etuka Sunday
The Nigeria Deposit Insurance Corporation (NDIC), yesterday disclosed that it paid a cumulative sum of N116.258 billion to depositors of closed Deposit Money Banks (DMBs), Micro-Finance Banks (MFBs) and Primary Mortgage Banks (PMBs), as at December, 31, 2018.
NDIC also informed that it would collaborate with the Central Bank of Nigeria (CBN) in the coming years, to ensure effective supervision of banks and the adherence to prudential guidelines and code of corporate governance for banks to ensure their safety and the overall stability of the Nigerian financial system.
This was disclosed by the Managing Director/Chief Executive Officer, NDIC, Umaru Ibrahim while speaking on the occasion of the “NDIC Special Day” at the 14th Edition of Abuja International Trade Fair.
Represented by the Director, Research, M.M Ibrahim, the NDIC boss said, the total amount of N116.258 billion comprised payments of insured and uninsured deposits of N108.641 billion, N2.973 billion and N70.53 million to depositors of defunct DMBs, MFBs and PMBs, respectively.
He said, in the last quarter of 2018, the CBN revoked the licenses of 154 MFBs and 6 PMBs due to their insolvency, corporate governance issues, etc. Hence, the Corporation successfully liquidated the failed banks and has commenced payment to the depositors of the affected banks.
He said, as at 30th June, 2019, the Corporation received a total number of 35 petitions/ complaints from Banks customers on various issues such as ATM frauds, unauthorized funds transfers, cheque related issues and much more, adding that investigations and mediation were carried out Where necessary and customers were appropriately reprieved.
He said, “recently, in collaboration with the CBN, the Corporation adopted a ’bridge bank’ resolution option in the resolution of Skye Bank Plc and the establishment of Polaris Bank Ltd.
“Consequently, Polaris Bank Ltd was able to continue banking operations in the 277 branches of the defunct Skye Bank, over 6000 jobs were saved and depositors have unhindered access to their deposits in excess of N949.60 billion as at June 2018,” he said.
According to him, as provided for in the NDIC Act 2006, when insured financial institutions fail, depositors of Deposit Money Banks (DMBs), Non-Interest Banks (NIBs) and Primary Mortgage Banks (PMBs) are reimbursed up to a maximum limit of N500,000.00, while the maximum insured coverage for depositors of Microfinance Bank (MFBS) is N200,000.00. However, the insured limits are periodically reviewed by the Board of the Corporation to ensure that majority of depositors are covered.
He said, as a member of the Nigerian financial safety-net, a crucial public policy objective of the Corporation is the protection of depositors of insured financial institutions as well as promoting public confidence in the financial system.
He said, as part of its mandate, NDIC in partnership with the Central Bank of Nigeria (CBN), jointly carry-out risk based supervision of Banks to ensure early identification and timely intervention in potentially troubled banks.
He said, NDIC is celebrating its 30th anniversary this year and has been able to record a number of significant achievements which has contributed to the stability of the nation’s financial system.
He informed, that the NDIC Academy and Learning Center was recently accredited by the Chartered Institute of Bankers of Nigeria as a major training hub for financial institutions. In the same vein, the Corporation has continued to provide capacity building for Deposit Insurers in other jurisdictions in Africa and beyond.
He said, in August 2019, the Corporation signed an MOU on experience sharing and capacity building with the Korean Deposit Insurance Corporation (KDIC) to further deepen the implementation of the DIS in Nigeria.
He said, the NDIC is also a founding member of the international Association of Deposit Insurers (IADI) and the MD/ CE is the current Chairman of the Africa Regional committee of that organisation.
He urged Traders, artisans, farmers and other small savers to ensure that their savings are deposited in banks or other licensed deposit-taking financial institutions nearest to them to avoid losses that could result from fire incidents, burglaries and other forms 0f crimes.
He assured that NDIC was always ready and willing to partner with the Abuja Chamber of Commerce and Industry.
“We recognize that the annual Trade Fair is a veritable platform and opportunity to educate the general public on the activities of the Corporation.
“The Fair not only provides us with the opportunity to showcase our mandate and achievements, it also enables the Corporation to engage directly with depositors of closed financial institutions yet to access their trapped funds,” he added.
In his remarks, the President, Abuja Chamber of Commerce and Industry, (ACCI), Prince Adetokunbo Kayode commended NDIC for playing important role in the country’s economy.
Represented by the Director General, ACCI, Mrs Tonia Soyele, the ACCI President said, “public awareness about the deposit insurance cover available to depositors and related procedural/legal aspect such as you have exhibited at this fair are also necessary for promoting financial inclusion and further strengthening public confidence in the banking sub-sector.”