Failed banks: How NDIC refunds 100% of depositor’s money —Director

THE Nigeria Deposit Insurance Corporation (NDIC) has disclosed that it has a structure in place, which ensures that all depositors of Deposit Money Banks get full payment of their money back in the event of bank failure.

This is in reaction to insinuations in some quarters that the corporation pays a meagre N500,000 to those whose deposits are above N500,000 and pockets the rest while it pays N200,000 to those whose deposits are below N500,000.

Responding to questions at the sidelines of the 2022 NDIC recent workshop, organised for the Finance Correspondents Association of Nigeria (FICAN) and Business Editors,  in Port Harcourt the Director External Communications and Corporate Services NDIC MrBaahirNuhu explained that  at the point of closure, whether an insured  bank has money in its coffers or not the law  mandates NDIC to pay N500,000 to depositors of Deposit Money Banks, Primary Mortgage Banks and Non-Interest Banks and N200,000 to depositors of Microfinance Banks.

According to him, once that initial payment of the insured sum has been made, the liquidation process begins.

He explains further, “That process involves the realization of the assets of the bank in liduidation by NDIC. The assets involves debts owed to the bank  and tangible assets of the bank in liquidation.

“As NDIC realizes those sums, it then declares liquidation dividend. This dividend is what is paid to the insurer over and above the N500,000 and N200,000 that was insured by the corporation and are called uninsured deposits.

“Depending on the amount realised, those who have deposits above the statutorily insured deposits, NDIC will call on all depositors of those banks to come and take the initial dividend from the assets sold.

“If the money is enough to settle all the insured deposits, then the depositors will receive first and final dividend but if it is not enough to settle all, the depositors will receive that first dividend.

“After that, if more money is realised, then second and final dividend is paid to depositors which settles 100 percent of their funds in those banks.

“So, the N500,000 and N200,000 are the initial payments and the rest depends on how much the NDIC is able to realise.”

Earlier, Managing Director, Nigeria Deposit Insurance Corporation, Mr Bello Hassan said the corporation had realised enough funds from its assets to fully pay all depositors of 20 liquidated banks.

Specifically, he said the corporation in September declared 100 per cent liquidation dividend in 20 institutions.

The dividends were in respect of the 49 Deposit Money Banks (DMBs) in-liquidation.

The three-day workshop, which was its 19th edition, had “Boosting Depositors Confidence amidst Emerging Issues and Challenges in the Banking System,” as theme.

Hassan noted that the corporation had cumulatively paid ₦11.83 billion to more than 443,949 insured depositors and ₦101.37 billion to uninsured depositors of all categories of banks in-liquidation, as at June 2022.

“The NDIC bank liquidation mandate entails reimbursement of insured and uninsured depositors, creditors, and shareholders of banks in- liquidation.

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“The liquidation activities, as at June 30, 2022, covered a total of 467 insured financial institutions in in-liquidation, comprising 49 DMBs, 367 MFBs, and 51 PMBs,” he said.

The NDIC boss said that the corporation had also provided deposit insurance coverage to 981 insured financial institutions.

He named the financial institutions insured to be 33 DMBs made up of 24 Commercial Banks, six Merchant Banks and three Non-Interest Banks (NIBs) plus two Non-Interest Windows; 882 Microfinance Banks (MFBs); 34 Primary Mortgage Banks (PMBs); 3 Payment Service Banks (PSBs) and 29 Mobile Money Operators.

The NDIC boss said that the corporation had in May, developed and deployed the Single Customer View (SCV) platform for the Microfinance and Primary Mortgage Banks, to strengthen its processes and procedure for data collection.

He explained that the platform would not only ensure availability of quality, timely and complete data to the NDIC, but would eliminate delays often experienced in reimbursing depositors, following revocation of institutions’ licences by the CBN.

He said that the final phase of the implementation of the SCV for Deposit Money Banks (DMBs) would be achieved through the incorporation of the SCV template as part of the on-going Integrated Regulatory Solution (IRS) jointly being developed with the CBN.

On consumer protection, the NDIC boss said the corporation had strengthened its complaints resolution platforms, which included the Toll-Free Help Desk, social media handles and Complaints Desks in the Bank Examination.

Other strengthened platforms are Special Insured Institutions and Claims Resolutions Departments, and the Zonal Offices, to receive and process complaints from depositors.

He commended stakeholders and reiterated that the landmark achievements of the corporation and others would not have been possible, without their active support.