By Obinna Chima, James Emejo and Nume Ekeghe
In order to mitigate the effects of the challenges facing the economy in the banking sector, the Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, has advised banks to beef up their capital.
Umaru said this while addressing financial journalists at a just concluded workshop organised by the corporation in Kaduna at the weekend.
He noted that issues such as rising non-performing loans and strain in liquidity were some of the challenges confronting the banks, just as he assured bank customers that the regulators would continue to ensure that the banking system remains sound and safe.
“The banks are facing liquidity issues; unemployment also affecting us globally, dwindling revenues and profits, high expectations of quality services from depositors and high expectations from investors.
“A lot of banks also need to recapitalise, and we know what it takes these days to raise fresh long-term capital. All these are daunting challenges that not only our own banks are facing, a lot of banks globally also face same challenges. Here, we are talking about high interest rate, in some parts of Europe and the United States, they are talking about negative interest rates. That is, you pay the banks to keep your money and they don’t give you anything in return.
“It is obvious that for any individual or organisation to survive, one has to do a lot to overcome this very turbulent moment. For us, in the area of supervision and regulation of insured financial institutions, it is very neccessary that we follow the dynamics, and continue to do everything possible to ensure that the deposit money banks, the primary mortgage banks and microfinance banks continue to be reasonably creative and innovative in their products and services, so that they would be able to weather the storm,” the NDIC boss added.
Furthermore, Umaru noted that with the gradual increase in the use of mobile banking in the country, there was need to ensure that fraudsters do not take advantage of the system. To this end, he said members of the bankers’ committee were doing everything to weather mobile banking channels in the country are well secured it.
“The other emerging issue relating to this is the current problem we are facing regarding Wonder Banks. We would not relent in calling Nigerians and in sensitising them about the dangers of patronising Wonder Banks. We have them in Enugu, Plateau, Kaduna and some other states. Please help us continue to tell members of the public that they should not patronise such institutions.
“These are institutions that are not licensed by the Central Bank of Nigeria (CBN) or insured by the NDIC. You are aware of the very recent issue of MMM. I understand that they just closed the window for sometime, but we would continue to sensitise Nigerians against it,” he added.