Since it was established in 1988, Nigeria Deposit Insurance Corporation (NDIC), ha liquidated 427 financial institutions.
Giving a breakdown at the 2020 Finance Correspondents Association of Nigeria (FICAN) Annual General Meeting (AGM) and Forum in Abuja, on Friday, Assistant Director, Insurance and Surveillance Department, NDIC, Mr John Kayode Abiodun, said the figure comprised of 51 Deposit Money Banks (DMBs), 325 Micro Finance Banks (MFBs) and 51 Primary Mortgage Banks (PMBs) as at December 2019.
While saying that the corporation successfully paid in full the deposits of 18 DMBs both insured and unsured ones, the Assistant Director disclosed that depositors of Fortune International Bank, Triumph Bank and Peak Merchant Bank have been unable to get their monies due to litigation challenging the revocation of their operating licenses as the deposit insurer had to suspend their payment last year.
“You will recall that the Central Bank of Nigeria (CBN) revoked the operating license of the troubled Skye bank and NDIC resolved the problem of the defunct bank by using Bridge Bank Mechanism.
“It was done through the establishment of Polaris Bank and ensured that depositors of defunct Skye bank continued to operate their accounts with the new bank,” he said.
According to Abiodun, 6,000 jobs have been saved in the process when Polaris acquired Skye Bank.
He said that Polaris bank was later acquired by Asset Management Corporation of Nigeria (AMCON) for subsequent sale to interested investors.
Abiodun said in spite the success recorded in failure resolution, the NDIC’s effort in resolving failures had been impaired by some challenges.
He identified delays in revocation of the licenses of terminally distressed banks, depositors and creditors apathy and ignorance as well as delays in filing claims as part of problems being experienced.
According to him, others are the recovery of debts owed the failed banks, legal actions of owners of closed banks and protracted litigation.
The assistant director reiterated the commitment of the corporation toward regulating the financial institutions in the country.
He, however, underscored the need to regulate the banking institutions, adding that if the banks were not regulated and perhaps collapsed, other sectors of the economy would be affected.
