NDIC partners judiciary on depositors funds’ recovery

The Nigerian Deposit Insurance Corporation has announced the strengthening of its partnership with the judiciary to expedite the prosecution of failed financial institutions.

NDIC’s Managing Director, Bello Hassan, disclosed this on Monday at the 19th Abuja International Trade Fair, themed, “Mobility: Options for Transport, Trade Finance, and Taxation.”

Hassan said the initiative has led to the resolution of long-standing cases and the declaration of 100 per cent liquidation dividends to uninsured depositors of more than 20 closed banks.

He reiterated the importance of deposit insurance, stressing that the corporation has played a pivotal role in maintaining stability by ensuring that when banks fail, depositors are promptly compensated.
This, he said, aligns with the provisions of the Banks and Other Financial Institutions Act 2020 and the NDIC Act 2023.

Bank failures have been a recurring issue, sparking increasing concern among stakeholders who are now demanding legal action against board directors involved in these collapses.

This growing call for accountability reflects the urgent need for stronger governance and oversight in the banking sector to prevent future occurrences.
Reassuring customers, Hassan said the corporation is addressing the impunity of bank board directors and has implemented measures to prosecute them in order to promote financial stability.

He said, “The importance of deposit insurance cannot be overstated in a financial system where confidence is essential. It acts as a safety net that reassures depositors, builds trust in the banking system, and helps to prevent bank runs during periods of uncertainty.

“Over the years, the NDIC has been instrumental in promoting stability by ensuring that when banks fail, depositors are promptly compensated. Hence, the corporation has strengthened its collaboration with the judiciary to expedite the prosecution of failed institutions.
“This has resulted in the resolution of long-standing cases and the declaration of 100 per cent liquidation dividends to uninsured depositors of over 20 closed banks. Alternative Dispute Resolution mechanisms have also been employed to enhance our liquidation activities and improve debt recovery.”

Speaking on the payment of insured deposits to customers affected by the Heritage Bank closure, Hassan said NDIC’s approach has enabled the payment of 84.98 per cent of depositors with BVN-linked accounts to date.

“In an unprecedented achievement, the NDIC commenced payments to depositors within four days of Heritage Bank’s closure. By leveraging depositors’ Bank Verification Numbers as unique identifiers, the corporation was able to identify alternate accounts and credit the insured amounts of up to N5m directly, without the need for forms or physical visits to NDIC offices.

“This innovative approach has enabled the payment of 84.98 per cent of depositors with BVN-linked accounts to date. This prompt response, alongside the recent increase in deposit insurance coverage from N500,000 to N5m, has significantly mitigated the impact of the bank’s failure on depositors,” he added.
In his remarks, the President of the Abuja Chamber of Commerce and Industry, Emeka Obegolu, commended NDIC’s commitment to safeguarding depositors and fostering a robust banking system, emphasising its importance for economic growth and facilitating trade and investment, thereby reinforcing the foundation of national development.

Obegolu, represented by the chamber’s Director-General, Agaba-Idu Jideani, said, “Today, we celebrate not just an institution but a cornerstone of our nation’s financial stability. The NDIC has been a critical player in safeguarding depositors, promoting confidence in our banking system, and ensuring the soundness of the financial sector.

“The corporation’s efforts are built on a solid foundation of trust, transparency, and financial prudence. These values resonate deeply with our aspiration at the Abuja Chamber of Commerce and Industry, where we strive to create an enabling environment for businesses to thrive in Nigeria.

“As we embrace the theme of this year’s trade fair, ‘Mobility Options for Transportation, Trade Finance, and Taxation,’ I commend the NDIC for fostering trust in our financial ecosystem. The ability to move goods, services, and capital efficiently depends heavily on a stable and trustworthy financial system.

“The NDIC’s focus on protecting depositors and promoting a robust banking system is crucial not only for economic progress but also for enabling seamless trade and investment, which strengthens the foundation of national development.”