NDIC Calls Out Debtors of Failed Banks, Discloses How Depositors Without BVNs Can Be Paid

NDIC Calls Out Debtors of Failed Banks, Discloses How Depositors Without BVNs Can Be Paid

  • The Nigeria Deposit Insurance Corporation (NDIC) has said that it is ready to begin the recovery of N400,000 billion owed to failed banks
  • The NDIC boss, Bello Hassan, said most debtors of failed banks are recalcitrant in the repayment of their loans
  • He called on depositors of failed banks without Bank Verification Numbers (BVNs) to come for verification and get paid

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The Managing Director and Chief Executive Officer of Nigeria Deposit Insurance Corporation (NDIC), Bello Hassan, said on Tuesday, November 28, 2023, that the corporation was prepared to take swift action to recover over N400 billion owed failed banks by debtors.

Hassan said debt recovery is one of the most significant challenges hindering its deposit insurance operations.

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Customers queuing for funds in a bank Credit @NDIC
Source: UGC

NDIC is ready to wield the big stick to recover N400,000 billion from failed banks' debts

He disclosed this at the opening of the 20th workshop for business editors and finance correspondents in Owerri, with the theme: Stock-taking of Deposit Insurance Practice: Assessing the Now, Evaluating the Challenges, and Forecasting the Future.

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The NDIC boss said the corporation would take advantage of the powers at its disposal via the revised NDIC Act, 2023, to hasten the debt recovery process.

According to him, non-recovery of debts hindered the smooth payment of many depositors of liquidated banks.

He said:

“A lot of customers of banks in liquidation that borrowed are not willing to repay those debts. And I want to put it on record that those debts or loans were granted out of deposits of people that the banks collected.

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“So, it is only when those debtors pay back that the NDIC can now pay the depositors of those failed banks. And that is one of the most significant challenges that we’re facing.
“Luckily enough, there is a review in the 2023 NDIC Act, and a lot of powers have been given to the corporation to expedite this process. We hope to leverage that to ensure we recover more to pay those depositors.”

ThisDay reports that Hassan said the total debt owed to failed banks is over N400 billion, including commercial banks, microfinance banks, and primary mortgage institutions.

He said a significant recovery had been made, while the affected depositors had been paid.

NDIC disburses about N1.6 billion to 40,000 depositors of failed banks

Hassan stated that substantial payments of the insured sums had also been made to depositors of banks whose licenses were revoked in May 2023 by the Central Bank of Nigeria (CBN).

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Per the NDIC boss, over N1.6 billion has been disbursed to 40,000 depositors while asking others with no Bank Verification Numbers attached to their bank accounts to be verified to access their insured deposits.

Commenting on CBN’s planned recapitalization of the banking sector, the NDIC helmsman said the move was unavoidable to enable banks to participate adequately in the proposed $1 trillion economy currently designed by President Bola Tinubu’s government.

He said:

“You also need bigger banks to play within that space. The government is implementing the agenda of growing the Gross Domestic Product (GDP) to beyond $1 trillion.

In Early November 2023, the NDIC boss said there were no new failed banks in Nigeria.

He debunked social media reports that the list of 20 failed banks is a recent development.

"Come Now": NDIC begins customers' verification of failed bank 20 years ago, gives instructions

Legit.ng reported that the Nigeria Deposit Insurance Corporation (NDIC) has started verifying the insured depositors of Peak Merchant Bank in liquidation.

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This is in line with its duty of deposit guarantee and reimbursement of depositors in case of bank failure.

Peak Merchant Bank Limited's operating license was revoked on Friday, 28 February 2003.

Source: Legit.ng

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