Nigeria Deposit Insurance Corporation (NDIC) is to go tough on debtors of failed banks, according to Mr. Bello Hassan, new managing director of the organization.
Hassan,who stated this at his inauguration by Mrs. Zainab Ahmed, minister of Finance, Budget and National Planning, in Abuja, also expressed determination to work with relevant institutions to strengthen the NDIC and enable it address failed banks’ resolution, more promptly.
“We will work with relevant stakeholders to address challenges currently facing the NDIC. One of the challenges is the recovery powers.
“If you look at the number of institutions the corporation has liquidated since inception it’s only about 10 DMBs (Deposit Money Banks) the corporation was able to pay 100% liquidation dividend.
“For the remaining ones, it means recovery has not been made 100%. So there is the need to enhance the powers of the corporation to be able us pursue these debtors to make sure that all the obligations are recovered because those loans and advances were financed by depositors’ money not shareholders’ money.
“So there is the need to enhance the powers of the corporation to be able to go after those obligors, so as to recover depositors’ money, pay them and build confidence and stability in the financial system,” the MD said.
He also said that he was determined to grow the Depositors’ Fund beyond the current level of less than N2 trillion.
According to the new MD, “There is need to build up depositors insurance fund because that’s what we use in making pay-out in the event of any liquidation. If you look at it, what we have is less than N2 trillion so there is the need for us to quickly fast-track the build-up of this fund in the event of any eventuality we shall have sufficient fund to be able to pay depositors without recourse to the treasury and the need to ensure that we offer assistance to insured deposit-taking institutions in a timely manner in order to promote stability and confidence within the banking system.”
In her address, the minister acknowledged issues affecting the operations of the NDIC in the Banks and Other Financial Act (BOFIA) 2020 and promised to address them.
Her words: “I am aware there are issues that arose from the recently amended Banks and Other Financial Act (BOFIA) 2020 to which my attention was drawn. We will work with you and the Board to resolve them. I pledge the Ministry’s continuous support and collaboration to your Corporation in the discharge of its mandate.”