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Mr. Bello Hassan, the Managing Director/Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), issued a stern caution to the public against engaging with illegal fund managers, commonly known as wonder banks or Ponzi schemes. He emphasized that these entities promise high-interest rates and profits that are too good to be true, often resulting in devastating losses for unsuspecting individuals.
Hassan reiterated this warning while addressing participants at the NDIC’s Special Day during the 18th Abuja International Trade Fair. He pointed out that these illegal fund managers lack the necessary licenses from the Central Bank of Nigeria (CBN) and are not covered by the NDIC deposit insurance scheme.
Represented by Mr. Bashir Nuhu, the Director of Communication and Public Affairs at NDIC, Hassan advised the public to only patronize banking institutions displaying NDIC stickers with the words “Insured by NDIC” in their banking halls, entrances, and branches across the country.
He emphasized the NDIC’s commitment to ensuring the stability of the financial system by complementing the CBN’s efforts in supervising the banking sector and safeguarding depositors’ funds in case of bank failures.
Hassan stated that Nigerian depositors are a top priority for the NDIC, and their foundation is built on ensuring the safety and security of their deposits, as encapsulated in their strapline, “Protecting your bank deposits.” This assurance of deposit safety is crucial for financial inclusion and encourages Nigerians to trust that their money is secure and accessible when needed.
Furthermore, he highlighted the NDIC’s role in consumer protection, emphasizing that its activities, including bank supervision, continuous monitoring, and oversight, enhance confidence in the financial system and act as an incentive for the unbanked population to access the services of licensed banks.
Hassan reaffirmed the NDIC’s key mandates, which include providing deposit guarantees to depositors of insured financial institutions, bank supervision, distress resolution, and bank liquidation. He noted that the NDIC has significantly strengthened its capacity to fulfill these responsibilities over the years, contributing to the establishment of a robust deposit insurance scheme in Nigeria.
Regarding the recent revocation of licenses for 179 microfinance banks and four Primary Mortgage Banks by the CBN, Hassan mentioned that the NDIC swiftly initiated the liquidation process and began disbursing insured sums to depositors within seven days of the banks’ closure. As of September 22, 2023, the corporation had already paid a cumulative insured sum of N1.084 billion to 29,573 depositors affected by the closure of these banks.
He explained that the payment process is still ongoing, and depositors with funds exceeding the insured limit will receive liquidation dividends after the recovery of debts and the sale of physical assets of the closed banks.
Hassan concluded by listing the 20 closed banks for which the NDIC is currently verifying and disbursing liquidation dividends to depositors and stakeholders, including Allied Bank, Peak Merchant Bank, Commerce Bank, Continental Merchant Bank, Financial Merchant Bank, Fortune Bank, Gulf Bank, Hallmark Bank, Icon Merchant Bank, Liberty Bank, Nigeria Merchant Bank, North-South Bank, Premier Commercial Bank, Prime Merchant Bank, Progress Bank, and Merchant Bank.
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