The Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim Friday said the corporation protected deposit liabilities of over ₦1.759 trillion which ensured that depositors had uninterrupted access to their funds.
This also prevented the systemic repercussions of the failure of the bank on the entire financial system, even as 12,667 jobs were safeguarded.
Ibrahim stated this at a media parley to commemorate the 30th anniversary of the NDIC in Abuja.
Furthermore, in the discharge of its statutory role under Section 39 (i) of the NDIC Act 16 of 2006 and in consultation with the CBN, the Corporation adopted the Bridge Bank mechanism to resolve the failure of three (3) DMBs namely Afribank, Spring Bank and BankPHB in 2011. Similarly, in 2018, that mechanism was used to resolve the failure of Skye Bank Plc. Indeed, the merits of the bridge bank to the nation’s economy are numerous.
“It should interest you to note that The Bridge bank option engendered macro-economic stability, sustained daily operations of the failed banks including meeting maturing obligations and enhanced the confidence of Depositors and other Stakeholders,” he said.
Ibrahim stated that NDIC was designed as a Risk-Minimiser with the mandate of Deposit Guarantee, Banking Supervision, Distress Resolution and Bank Liquidation. The Corporation had in the last 30 years achieved some milestones in the discharge of its mandate to the satisfaction of its stakeholders.
“Deposit Guarantee is a key and distinct mandate of the corporation. The NDIC guarantees payment of deposits up to a maximum limit in accordance with its statute in the event of failure of an insured financial institution. The DIS covers all deposit-taking financial institutions licensed by the CBN which include Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Primary Mortgage Banks (PMBs), Non-Interest Banks (NIBs) and subscribers of Mobile Money Operators (MMOs). Accordingly, the NDIC, currently provides Deposit Insurance cover to 27 DMBs, 918 MFBs, 34 PMBs and 2 (Two) NIBs.”
During the period under review, he further stated that to date, the NDIC has paid a cumulative sum of over ₦8.25 billion as insured amount to 442,999 depositors of closed DMBs; paid over ₦2.97 billion to 83,415 depositors of closed MFBs, and over ₦70.53 million was paid to 869 depositors of closed PMBs.