Nigeria: NDIC distributes N1.7 Billion to 42,000 depositors in swift response to Bank Closures
The Nigeria Deposit Insurance Corporation (NDIC), has distributed N1.7 billion to more than 42,000 depositors affected by the closure of failed bank.
The Managing Director and Chief Executive Officer of NDIC, Mr. Bello Hassan confirmed this at the 2023 NDIC Editors’ Forum held in Lagos with the theme ‘Stocktaking of Deposit Insurance Practice: Assessing the Past, Evaluating the Present and Forecasting the Future.’
Hassan urged depositors of the 183 closed microfinance and primary mortgage banks without Bank Verification Numbers (BVNs) to step forward and claim their insured deposits.
“Earlier this year in May, the Central Bank of Nigeria (CBN) revoked the licenses of 183 institutions comprising microfinance banks and primary mortgage banks and we quickly advertised that the depositors of those institutions should come forward to get them verified so that we can pay them the insured amount.
“In terms of the insured amount paid today, we have paid more than N1.7 billion to more than 42,000 customers and we are calling on customers who had no BVN attached to their accounts in those microfinance banks to come forward and reach out to us at our offices across the six geopolitical zones so that they can get themselves verified so we can pay the insured amount,” he said.
Highlighting the background, Hassan explained that the Central Bank of Nigeria (CBN) had revoked licenses for 183 institutions, including microfinance banks and primary mortgage banks earlier in the year.
The NDIC swiftly appealed to depositors to verify their accounts for prompt payment of insured amounts.
So far, it has disbursed over N1.7 billion to more than 42,000 customers, and Hassan urged those without BVNs to visit NDIC offices across the six geopolitical zones for verification and payment.
Hassan emphasised the corporation’s efforts in enhancing depositor payouts, strengthening legal collaborations, and resolving prolonged bank closure cases.
The Single Customer View (SCV) framework, judicial cooperation, and out-of-court settlements played a pivotal role in achieving these milestones.
“We have reinvigorated the processes by visiting the customers that owed these banks and also through the sensitisation we have had with our lawyers representing us; we were able to win cases in court which led to the recovery of those debts,” he added.
He noted the successful recovery of debts owed to banks in liquidation, allowing the declaration of liquidation dividends to depositors, creditors, and institutions.
Among the achievements outlined were the introduction of the SCV framework, improved collaboration with legal entities, efficient prosecution leading to informed judgments, and resolutions of long-standing cases such as Fortune and Triumph Banks in liquidation.
The NDIC has also established policies for out-of-court settlements, facilitating the resolution of protracted failed bank litigations.
Hassan commended their collaboration with the Central Bank of Nigeria in consumer protection, emphasising enhanced public awareness on deposit insurance and financial literacy.
He said the NDIC has intensified liquidation activities, significantly increased debt recovery rates, and declared 100% liquidation dividends to uninsured depositors of more than 20 deposit money banks in liquidation.
“We have invigorated our liquidation activities, and greatly increased debt recovery rate, leading to the declaration of 100 per cent liquidation dividends to uninsured depositors of over 20 deposit money banks in liquidation as well as payments to other stakeholders such as creditors, ex-staff and shareholders,” said Hassan.
