NDIC to review contribution of banks to Deposit Insurance Fund
…Pays over 108.708 bn to 443,946 insured, uninsured depositors of in-liquidation banks
…As Bridge Bank option secures N1.02trn deposits, saves 12,667 jobs
By Uthman Salami
The Nigeria Deposit Insurance Corporation (NDIC) has announced the commencement of the overall review of contribution of banks to Deposit Insurance Fund (DIF) to a more risk-based approach.
Equally, the corporation disclosed that it had successfully made payment of about N8.62 billion to over 443,946 insured depositors as dividends for banks liquidated throughout the country as at 30th September, 2021
The Corporation revealed that another payment of about N100.080 billion had been paid to uninsured depositors across the country.
The Managing Director/Chief Executive Officer of NDIC, Mr. Bello Hassan, made these disclosures during the 2021 Edition of the annual NDIC Editors Forum held during the weekend in Lagos.
While delivering his keynote address at this year’s NDIC annual Editors workshop which was themed; “Enduring Extreme Disruptions: Resilience & Reinvention for Banking System Stability & Deposit Insurance,” Mr. Hassan noted that the review of banks contributions to DIF is to ensure that the probability of the risk crystallizing becomes a major factor in the pricing methodology of premium/contribution going forward.
“Our key policy thrust is to scale up the deposit insurance framework, timely support to insured to insured institutions as and when required,faster and orderly resolutions of failed insured institutions as well as assistance to monetary authorities in promoting stability in the banking system,” he assured.
He added that there was “need for the Corporation to reinvigorate its strategies and initiatives in the face of extreme disruption in the banking industry and other topical issues.”
Stressing on the role of the media in the process of getting the vision and policy direction of his administration known to the masses, he noted that the administration under his leadership placed huge value on the creation of working and flawless relationship with every critical and strategic stakeholders in realizing the public policy objectives as contained in the establishing Act of the Corporation.
Reeling out the Corporation’s accomplishment, Mr. Hassan said NDIC has cumulatively paid the sum of N108.708 billion to 443,946 insured depositors, as well as uninsured depositors of in-liquidation banks.
In his words, “NDIC had paid a cumulative sum of N8.268 billion to 443,946 insured depositors and N100.080 billion to uninsured depositors of deposit money banks in-liquidation as at 30th September, 2021 while N3.413 billion was paid to 90,945 insured depositors of microfinance banks and N1.218 million to uninsured depositors.”
He further revealed that, “In the same vein, cumulative insured amount paid to 1,553 depositors of closed primary mortgage banks as at 30th September, 2021 stood at N110.15 million while N7.965 million was paid as uninsured deposits.”
He noted that the major success story of the corporation’s in bank liquidation was the payment of N1.274 billion to 991 creditors and N4.886 billion to 965 shareholders of banks in-liquidation as at 30th September 2021.
In implying the significance of this landmark achievement, he said NDIC had now amassed enough assets to settle every insured and uninsured depositors of the banks who presented for payment, noting that “Currently, 19 out of the 49 DMBs in-liquidation fall into this category.”
Speaking further on the activities of the Corporation in pursuant of policy objectives as contain in the provisions setting up NDIC’s Act, the NDIC boss said that “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.”
Bridge Bank option secures N1.02trn secures, saves 12,667 jobs
While explaining some of the options being embarked upon by Corporation, he said “the bridge bank option did not only prevent a systemic crisis,” noting that the policy alone had been able to secure N1.021 trillion deposits.
He said the Bridge Bank policy has ensured that depositors had continued access to their funds and financial services.
He noted that, “The implementation of the Bridge Bank option also saved over 12,667 jobs while over 877 branch network and services of the affected banks were maintained.”
He affirmed that all other “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.”
He, however, sought support of the participants in the quest of the Corporation to effectively discharge its core mandates, saying that they would leave their doors open for “suggestions and observations, while partnering with you on capacity building and other areas of mutual benefit.”
