Home Business NDIC pays N6.8bn insured deposits to 528,277 depositors of closed banks — MD

NDIC pays N6.8bn insured deposits to 528,277 depositors of closed banks — MD

by Business News Report

The Nigeria Deposit Insurance Corporation (NDIC) says it has paid out a cumulative N6.831 billion insured deposits to 528,277 depositors of 49 closed Deposit Money Banks (DMB) as at Dec. 31, 2014.
The Managing Director of NDIC, Alhaji Umaru Ibrahim, announced this at the NDIC special day at the on-going Abuja International Trade Fair in Abuja. Ibrahim said the payment, which was in line with the act establishing NDIC, was also to ensure that un-insured depositors of closed DMB recovered their money.
According to him, NDIC has paid a cumulative liquidation dividend of N94.737 billion to 250,592 to un-insured depositors of same 49 closed DMB as at December 2014.
He said that NDIC had declared in full, a final liquidation dividend of 100 per cent of total payments in 14 of the failed banks out of the 49 closed DMBs. He explained that payments were on-going for the depositors of Micro Finance Banks (MFBs) and Primary Mortgage Banks(PMBs).
He said that the prompt payment of the insured sum was designed to reduce the impact of bank failure and also build public confidence. Ibrahim said that the participation of NDIC at the fair also provided a unique platform for public awareness on the benefits and limitations of deposit insurance scheme (DIS) in Nigeria. He explained that the DIS was one of the financial safety net in the economic system designed to protect uninformed bank depositors and ensure safety, soundness and stability of the banking system.

According to him, in the event of any bank failure, each depositor was entitled to a maximum claim of N500,000 per depositor of DMB and non-interest or Islamic banks.
For MFB and PMB, he said that each depositor was entitled to receive N200,000 in the event of any failure from the banks.
He added that the insured sums covered over 90 per cent of bank depositors.
Ibrahim said that depositors with claims above the insured sums were entitled to liquidation dividends from the proceeds of sale of the physical assets and recovery of debts owed to such failed banks. He noted that the theme of the 2015 Abuja fair: “Entrepreneurship as a panacea for economic growth,“ would drive greater business opportunities and promote financial empowerment. He said that the fair would open up new avenues for industrial development and ultimately improve the life of Nigerians.
The NDIC MD said that in a bid to send strong signal to bank operators against unethical practices in the banking system, NDIC was conducting risk-based supervision.
He said that the supervision, in collaboration with the Central Bank of Nigeria (CBN), had led to the supervision of the 22 DMBs, 882MFBs and 61PMBs in the country.
Ibrahim called on Nigerians whose deposits were trapped in failed banks to visit NDIC pavilion at the trade fair to receive information on how to recover and claim their deposits.
Responding, the Vice-President of the Abuja Chamber of Commerce and Industry limited (ABUCCI), Mr Osi Imomoh, noted that credit was the main driver of growth, economic progress and development. He said it was important to ensure proper credit administration in the financial sector.
He said improper management of credit administration could inhibit growth in businesses. He explained that high interest rate structure, abstract classification of non performing credit and administrative recall of credit, especially without regard to business cycles, could slow down growth in businesses. Imomoh said more collaborations among regulators, the banks and ABUCCI would do the economy a lot good. He called on NDIC to extend their technical assistance to other underlying institutions like ABUCCI. “We will like to see more activity in the area of restructuring, turnaround and technical assistance extended beyond first line (banks) to other underlying institutions,“ he said.

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