The Nigeria Deposit Insurance Company (NDIC) has paid guaranteed sums and liquidation dividends to the tune of N108.348billion to insured and uninsured depositors as at September 30, 2021.
The corporation also paid N3.413billion to 90,945 insiured depositors of microfinance banks under the same period.
Managing Director/CEO NDIC Bello Hassan stated this at the editors’ forum organised by the corporation recently in Lagos.
He said: “Pursuant to provisions of the NDIC Act, several failure resolution initiatives such as Open Bank Assistance (OBA), Purchase & Assumption (P&A) and Mergers & Acquisition (M&A) had been adopted in resolving distress in various banks from 1989 culminating in the novel Bridge Bank option to resolve four problem banks in 2011 and 2018. The bridge bank option did not only prevent a systemic crisis, it secured N1.021 trillion deposits which ensured that depositors had continued access to their funds and financial services. The implementation of the Bridge Bank option also saved over 12,667 jobs while over 877branch network and services of the affected banks were maintained. “The Corporation’s accomplishment in the payment of guaranteed sums and liquidation dividends speaks volumes of its commitment to the discharge of its unique mandate. NDIC had paid a cumulative sum of ₦8.268 billion to 443,946 insured depositors and ₦100.080 billion to uninsured depositors of deposit money banks in- liquidation as at 30th September, 2021 whileN3.413 billion was paid to 90,945 insured depositors of microfinance banks and ₦1.218 million to uninsured depositors. “Most importantly, the payment of N1.274 billion to 991 creditors and ₦4.886 billion to 965 shareholders of banks in-liquidation as at 30th September 2021 underscored the Corporation’s success story in bank liquidation. What this implies is that the Corporation had realised enough assets to pay all the insured and uninsured depositors of the banks that present themselves for payment. Currently, 19 out of the 49 DMBs in-liquidation fall into this category.”
In his presentation, Director NDIC Insurance and Surveillance Department Gana Galadima Y. spoke of symptoms of failing banks in a paper titled ‘The role of Deposit Insurance System (DIS) in Failure Resolution.’
He listed the symptoms to include “Illiquidity as manifested in inability to meet customers’ cash withdrawals or borrowing needs; increased petitions cases against the bank by aggrieved customers for inability to withdraw from their deposits; and distress borrowing at the money/interbank market at exceptionally high rates.
“Frequent requests for cash assistance from the regulatory authorities, patronage of CBN Discount Window or persistently overdrawing current account with CBN; low earnings and huge operational losses; inability to meet the regulatory thresholds e.g. of Capital Adequacy Ratio, Liquidity Ratio etc.; high staff turnover, especially at management level; persistent Late submission and falsification of Statutory Returns; and high level of Non-performing loans or Impaired Credits (NPLs). ETC.”