NDIC Paid over N2bn to Failed MFBs Depositors

09 May 2012

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MD, NDIC,   Umaru Ibrahim

By Chinazor Megbolu

The Nigeria Deposit Insurance Corporation (NDIC) said depositors of failed Microfinance Banks (MFBs) in the country had been paid over N2 billion.
The Managing Director/Chief Executive Officer, Mr. Umaru Ibrahim,who disclosed this in Lagos, explained that about 70, 424 depositors, which represented about 41 per cent of the total insured amount of about N4.94 billion had been paid the sum of N2.024 billion.

The NDIC chief executive noted that the payment was due to the revocation of operating licences of 103 MFBs by the Central Bank of Nigeria (CBN) in September, 2010.

He added that the payment was made directly to the depositors by the NDIC.
“Payment to the rest of the depositors continues through branches of the appointed agent banks close to the location of their closed MFBs, “he said.

Continuing, Ibrahim maintained that NDIC would go ahead to pay the insured sums as well as liquidation dividends to uninsured depositors of the banks closed before 2006.

He further stated that, NDIC in a bid to ensure protection for all customers of the financial system in the country, was advocating an integrated deposit insurance system (DIS) that would help, not only the small depositors of banks, but also small investors in the capital market as well as  insurance policy holders. Additionally, he said, when put in place, the integrated DIS would facilitate orderly development and growth of the entire financial system.

He also posited that the deposit insurance system being operated in Nigeria had a primary objective of protecting mainly the small savers in a bid to guide against moral hazards as well as to instill market discipline in both the banks and big time depositors.

Ibrahim further averred that the NDIC Act 22 of 1988 and 16 of 2006 as amended empowered the agency to adopt appropriate failure resolution measures to address the problems of failing insured institutions in the interest of depositors.
“Over the years, the corporation adopted different measures ranging from pay out to purchase and assumption options to discharge that mandate. The most recent resolution option by the corporation to address the problems of the failing banks was the establishment of bridge banks on August 5, 2011,” Ibrahim said.

Tags: Business, Nigeria, Featured, NDIC

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