The Nigeria Deposit Insurance Corporation (NDIC) has intensified its efforts to recover outstanding debts from nearly 600 liquidated financial institutions to facilitate the payment of uninsured deposits.
Speaking at a sensitization seminar for Debt Recovery Agents in Abuja on Thursday, Patricia Okosun, Director of the Asset Management Department, revealed that the Corporation is currently managing the assets of 32 Deposit Money Banks (DMBs) and over 560 Microfinance Banks (MFBs).
The seminar, themed “Operationalizing the Provisions of NDIC Act 2023 for Effective Debt Recovery,” was designed to equip recovery agents with the expanded legal powers granted by the new legislation.
Okosun emphasized that the primary target remains the recovery of risk assets specifically loans and advances issued while the banks were still operational.
These recovered funds are critical, as they serve as the direct source for reimbursing depositors whose accounts exceeded the initial insured limits.
Reinforcing this mission, Olufemi Kushimo, Director of the NDIC Legal Department, described the 2023 Act as a comprehensive recovery tool.
He noted that the legislation enhances the Corporation’s mandate to guarantee deposits and manage the payment of uninsured portions of failed bank holdings.
The seminar aimed to foster a stronger synergy between the NDIC and its recovery partners, ensuring that the agents act as effective extensions of the Corporation’s legal authority.
During the interactive sessions, recovery agents highlighted systemic loopholes that have historically hampered their work.
Dr. Abdullahi Tahir, an NDIC agent, advocated for the mandatory inclusion of the Bank Verification Number (BVN) in all loan issuance processes.
He pointed out that debtors frequently exploit corporate legal structures to hide behind multiple shell companies. By linking a single BVN across various corporate entities, the NDIC could more effectively freeze related accounts and compel recalcitrant debtors to settle their obligations.
Further challenges were raised regarding the internal failures of defunct banks. Augustine Ukauzo, a representative from Consecrated Law Firm, criticized the lack of due diligence and poor record-keeping by former bank officials.
He noted that many loans were granted based on personal familiarity rather than commensurate collateral, often with insufficient documentation to track the borrowers once the institution collapsed. These lapses, he argued, are fundamental reasons why many banks fail and why the recovery process remains complex.
The Abuja seminar, organized specifically for recovery agents operating in Northern Nigeria, marks a significant step in the NDIC’s strategy to clean up the balance sheets of failed institutions. By merging the legislative strength of the 2023 Act with more rigorous tracking technologies like the BVN, the Corporation aims to ensure that no loan is left unrecovered in its quest to protect Nigerian depositors.