The Nigeria Deposit Insurance Corporation NDIC has reiterated its commitment to collaborate with the Central Bank of Nigeria in ensuring the stability of the banking sector in the country.
Managing Director, NDIC, Bello Hassan made this known, at a forum with the theme ” Strengthening Nigeria’s Financial Safety-Net:, the Role of NDIC”, held in Lagos State.
Hassan noted that as the nation’s financial system continues to evolve and face new challenges, it was critical to ensure stability in the sector to engender growth and development of the economy.
“As our financial system continues to evolve and face new challenges, the NDIC remains steadfast in its mission to protect depositors and collaborate with the Central Bank of Nigeria (CBN) in ensuring the stability of the banking sector, which is critical to the growth and development of the economy.
“As you may be aware, the NDIC was established over three decades ago to protect depositors, especially the most vulnerable, and to contribute to the stability of the financial system.
“Our core mandate includes providing deposit insurance cover to depositors of licensed banks, supervising insured financial institutions, resolving distressed banks, and ensuring orderly resolution in the event of bank failure,” he said.
In advocating for an effective implementation of the deposit insurance system in Nigeria, the MD of the Corporation, solicited for continuous support to build a more resilient financial system that protects the interest of all stakeholders.
The NDIC however assured that it was working assiduously to ensure that all depositors of the defunct Heritage Bank, with amounts exceeding 5 million naira are paid the balance of their deposits through liquidation dividends from the realisation of the bank’s assets and recovery of debts.
He notef that the decision to revoke the license of the defunct Bank, underscored NDIC’s role in safeguarding depositors in accordance with the relevant provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020 and the NDIC Act 2023.
Bello stated further that “In the discharge of this critical role of depositor reimbursement, the Corporation began the payment of the insured deposits of N5 million maximum per depositor within a record time of four days after the bank’s closure.
“This was achieved using Bank Verification Numbers (BVN) as a unique identifier to locate depositors’ alternate accounts in other banks without the need to fill forms or visit the NDIC offices.
“This innovative approach has indeed enabled the payment of 84.98% of depositors with BVN linked accounts to date.
The prompt payment of depositors, coming at a time when the Corporation had also recently increased the deposit insurance coverage from N500,000 to N5 million in Deposit Money Banks, significantly cushioned the negative impact of bank failure, especially during the current challenging economic climate.
“Having largely reimbursed depositors their insured deposits, the Corporation is committed to ensuring that depositors with balances exceeding N5 million are also paid the balance of their deposits. These uninsured deposits represent a significant portion of the total deposits in Heritage Bank, “he said.
Hassan disclosed that the Corporation has already initiated the process of debt recovery and realisation of investments as well as physical assets of the defunct bank to ensure timely payment to customers of the defunct bank.
