By 
The Nigerian Deposit Insurance Corporation (NDIC) has announced an enhanced partnership with the judiciary to expedite the prosecution of failed financial institutions. This move is aimed at accelerating the recovery of depositors’ funds and resolving long-standing financial cases.
Bello Hassan, the NDIC’s Managing Director, shared this development during the 19th Abuja International Trade Fair, themed “Mobility: Options for Transport, Trade Finance, and Taxation.” He highlighted that this collaboration has resulted in significant progress, including the declaration of 100% liquidation dividends to uninsured depositors of over 20 closed banks.
Hassan emphasized the vital role deposit insurance plays in maintaining financial stability, particularly when banks fail. He reiterated that the NDIC ensures depositors are promptly compensated, in line with the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020 and the NDIC Act 2023.
Bank failures have been a recurrent challenge in Nigeria, causing concern among stakeholders. Many are now calling for stricter legal action against the board directors responsible for these collapses, pushing for stronger governance and accountability in the banking sector to prevent future incidents.
Addressing this concern, Hassan reassured depositors that the NDIC has taken significant steps to hold bank directors accountable. Legal actions are being implemented to promote financial stability and deter future misconduct within the sector.
“The importance of deposit insurance cannot be overstated in a financial system where confidence is key,” Hassan remarked. “It serves as a safety net for depositors, fosters trust in the banking system, and helps prevent bank runs during uncertain times.”
Hassan further explained that the NDIC’s strengthened judicial collaboration has not only expedited the resolution of long-pending cases but also led to the payment of full liquidation dividends to uninsured depositors. The corporation has also incorporated Alternative Dispute Resolution (ADR) mechanisms to improve its liquidation processes and enhance debt recovery.
On the closure of Heritage Bank, Hassan provided an update, stating that 84.98% of depositors with Bank Verification Number (BVN)-linked accounts have received payments. The NDIC implemented a swift and innovative approach that allowed it to commence payments within just four days of the bank’s closure. By utilizing BVNs as unique identifiers, depositors were credited with insured amounts of up to ₦5 million without needing to visit NDIC offices or submit forms.
“This prompt response, combined with the recent increase in deposit insurance coverage from ₦500,000 to ₦5 million, has significantly reduced the impact of the bank’s failure on depositors,” Hassan added.
In his remarks, Emeka Obegolu, President of the Abuja Chamber of Commerce and Industry (ACCI), commended the NDIC’s commitment to protecting depositors and maintaining a resilient banking system. He stressed that NDIC’s efforts are crucial for promoting economic growth, facilitating trade, and supporting national development.
Represented by the chamber’s Director-General, Agaba-Idu Jideani, Obegolu praised the NDIC for its transparency, financial prudence, and dedication to building trust in Nigeria’s financial system. “The NDIC has been a cornerstone of financial stability in our nation, safeguarding depositors and ensuring confidence in the banking sector,” he said.
Obegolu also connected the importance of a stable financial ecosystem with the trade fair’s theme, emphasizing that efficient movement of goods, services, and capital relies heavily on a trustworthy financial system. He concluded by acknowledging the NDIC’s role in bolstering economic progress through its efforts to protect depositors and enhance financial stability.
The NDIC’s focus on collaboration, innovation, and accountability continues to serve as a foundation for Nigeria’s financial and economic growth, ensuring depositors’ funds are secure and promoting trust within the banking sector.
Comments