NDIC Raises Alarm As Failed Bank Debtors Avoid Repayment
- The NDIC raised the alarm over debtors of failed banks who conceal assets and obstruct court proceedings to escape repayment
- NDIC's Asset Management Department director warned that prolonged recovery delays reduce asset values and slow compensation to depositors of liquidated banks
- The corporation auctioned physical assets of three banks in November 2026 and is developing a new policy to strengthen recovery efforts
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The Nigeria Deposit Insurance Corporation (NDIC) has accused some debtors of failed banks of deliberately hiding assets, using delay tactics in court and attempting to intimidate recovery officials in order to avoid repaying outstanding loans.
The Director of the Asset Management Department, Ogungbemi Theophilus, made the disclosure on Monday at a Stakeholders' Seminar and Public Relations Workshop held at Exclusive Serene Hotels and Suites, Wuye, Abuja.
Source: Original
Theophilus said a common misconception among debtors was that the revocation of a bank's licence wiped out their repayment obligations.
He said:
"Some debtors of failed banks believe that because a bank's licence is revoked, he is not obliged to fulfil his responsibilities anymore.
"They hide assets. They frustrate service. Employ delay tactics in court. Sometimes, they try to intimidate. But we have to always do our job and professionally too."
He added that recovering loans from customers who had already defaulted before a bank collapsed was particularly difficult. "A loan that was not repaid when the bank was alive does not become easier to recover when the bank is dead," he noted.
How delays hurt depositors
The NDIC director cautioned that slow recovery timelines had direct financial consequences for depositors waiting on compensation. Buildings left vacant for long periods lose value, equipment deteriorates, and outstanding debts become harder to retrieve. "Every delay slows payment to depositors," he said.
Depositors of deposit money banks, non-interest banks and mobile money operators are insured up to N5 million per depositor per bank, while customers of microfinance banks, primary mortgage banks and payment service banks are covered up to N2 million. Theophilus said this coverage fully protects about 99% of depositors, but those with balances above the insured limits can only recover the remainder through liquidation dividends generated from asset sales and loan recoveries.
He explained:
"For them, the insured payment is only the first instalment. The balance the uninsured deposit can only be paid as liquidation dividend, from the proceeds of the assets we are able to realise and the loans we are able to recover."
NDIC auctions assets of three banks
Theophilus disclosed that the corporation held public auctions through competitive sealed bidding on November 3 and 4, 2026, to dispose of physical assets belonging to Union Homes Savings and Loans, Heritage Bank and Resort Savings and Loans. The sales took place across Lagos, Taraba and Adamawa states.
Source: Getty Images
He also warned professionals involved in asset recovery against misconduct, saying the NDIC had zero tolerance for insider dealing, undervaluation of properties, collusion with buyers and diversion of proceeds.
On cost discipline, he said:
"If it costs us N10m to recover N8m, the depositor has lost. We must be disciplined about costs, timelines and reporting."
The corporation said it was putting together a comprehensive Asset Management Policy to improve asset identification, valuation and disposal, and would deepen collaboration with auctioneers, valuers, surveyors and sales agents to speed up depositor settlements.
Source: Legit.ng
