The Nigerian Deposit Insurance Corporation (NDIC) has commenced the process of verification and payment of depositors of 154 microfinance banks (MFBs) and six primary mortgage banks (PMBS) whose licences were recently revoked by the Central Bank of Nigeria (CBN) in the last quarter of 2018.
Umaru Ibrahim, managing director and chief executive of NDIC, disclosed this on Thursday during the NDIC day at the 40th Kaduna International Trade Fair.
Represented by Mohammed Abubakar, head, communications and public affairs department, Ibrahim said since its inception, the corporation had recorded tremendous achievements in the implementation of various failure resolution strategies that ensured the continuous access of depositors to their savings.
According to him, the most recent of such interventions was the resolution of the defunct Skye Bank Plc which prevented the loss of over 6,000 jobs.
Ibrahim said: “It is on record that the ‘Bridge Bank’ resolution option adopted by the Corporation in the case of the defunct Skye Bank saved over 6,000 jobs in the industry, and also ensured that normal operations continued in all the 277 branches of the bank.
“In addition, the resolution option utilised which was completed with the
establishment of the ‘bridge bank’ now called the Polaris Bank, ensured that depositors of the closed banks had unhindered access to their deposits in excess of N949.60 billion as at June 2018.”
Besides the resolution of the defunct Skye Bank problem, he said the corporation has also taken measures to ensure that all those who contributed to the failure of the bank are prosecuted
to serve as a deterrent to others.
Ibrahim said in February 2019, a Lagos Federal High Court sentenced the Managing Director of the failed Integrated Microfinance Bank (IMFB) Plc, Mr. Simon Ademola Akinteye, to 32 years imprisonment over fraud that led to the failure of the banks.
He added that the corporation has also been relentless in its debt recovery efforts, particularly, the debts owed to banks in-liquidation so as to enhance payment of liquidation dividends to depositors whose balances are in excess of the insured limits.
He said in 2018, a total of N526.4 million was recovered in respect of Deposit Money Banks in-liquidation while N51.1 million and N710. 05 million were recovered from Primary Mortgage Banks and Micro Finance Banks respectively.
“The cumulative recovery from debtors of Deposit Money Banks, Micro Finance Banks and Primary Mortgage Banks as at December 31, 2018 stood at N29.01 billion, N125.84 million and N290.43 million respectively.
“These efforts were boosted by series of judgments obtained against banks in-liquidation and realisation of physical assets of closed banks.
“Apart from the conviction of the MD of the defunct Integrated MFB, the Corporation also secured a landmark judgment against the First Bank of Nigeria Plc. to the tune of N556.4 million in favour of depositors of Lead Merchant Bank Limited (in-liquidation),” he said.
According to him, the NDIC has extended Deposit Insurance coverage to depositors of non-interest banking institutions (NIBIS) and subscribers of Mobile Money Operators (MMOs) to the maximum limit of N500,000.00 through the Pass-Through Deposit Insurance Scheme (PTDIS) and Non-Interest Deposit Insurance Scheme (NIDIS) respectively.
“In the proactive management of responding to emerging
challenges in the financial system, the NDIC continues to be at the forefront of driving the key objectives of the National Financial Inclusion Strategy (NFIS) to reduce the percentage of adult Nigerians that do not have access to financial services from 46.3 per cent in 2010 to 20.0 per cent in 2020.
“To this end, the Corporation has redoubled its efforts at enhancing financial literacy to equip more Nigerians with the requisite knowledge required to make informed financial decisions in their engagement with various financial institutions.