The Nigeria Deposit Insurance Corporation NDIC. has called on depositors of defunct banks to complement the efforts of the corporation by being actively involved in the process of ensuring prompt payment of their deposits.
The Director, Claims Resolution Department Pamela Roberts made the call while speaking at the 2024 NDIC Workshop for Finance Correspondents Association of Nigeria(FICAN), with the theme “Strengthening Nigeria’s Financial Safety-Net: The Role of NDIC”, in Lagos State.
Roberts, in her presentation titled “Effective Bank Closure: The NDIC Experience and Current Innovations,” stated that the active responses of depositors could speed up the process of bank closure in the event of bank collapse.
She disclosed that the Corporation has been involved in 18 bank closing episodes since its establishment. However, identified depositor apathy as a major challenge to successful failure resolution in Nigeria.
She said, “The current innovations of the NDIC could be complemented by the active response of the depositors who should come forward to make their claims.
“As of today, NDIC has closed a total of 651 banks, involving 50 Deposit Money Banks(DMOs, 55 Primary Mortgage Banks(PMBs) and 545 Microfinance Banks(MFBs)”.
According to her, the Corporation has made several efforts to mitigate the challenge of delay in prompt.payment of customers of failed banks across the nation.
The NDIC Director highlighted innovations that have been introduced to strengthen orderly bank liquidation in the country, including the deposit tracer, Single Customer View framework, and the move of simplifying verification form requirement.
Recall that following the revocation of Heritage Bank’s banking license by the Central Bank of Nigeria (CBN) on June 3, 2024, the Corporation began the payment of the insured deposits of Five Million Naira (N5,000,000) maximum per depositor within four days of the bank closure.
NDIC was able to achieve the feat by using Bank Verification Numbers (BVN) as a unique identifier to locate depositors’ alternate accounts in other banks.
The Corporation made direct payment through BVN-linked alternate accounts without the need for depositors to visit its offices or fill out forms. This made NDIC achieve remarkable milestones in the prompt reimbursement of depositors of the defunct bank.
In the use of tools and technology for efficiency of bank closure, the information technology department played a pivotal role by providing sustainable gateway to contact customers directly.
They also developed a deposit register search portal for internal stakeholders to validate scheduled payment to depositors.
The Corporation further engaged the social media with regular updates shared on its platforms along with responses to public queries and monitored the digital and social.media platforms to gauge sentiment, report feedback to the management and recommended actionable steps.
In current innovations, the NDIC has established complaints desk in the claims resolution department, as well as the compilation of complaints reports.
It is, however, pivotal, as emphasised by the NDIC Director, to enhance public awareness and deployment of portal and use artificial intelligence to facilitate efficient claims and reimbursement.
She also urged the Corporation to adopt electronic forms for depositor verification rather than physical forms to avoid duplications in processing payments, stressing the need for depositors information to be properly documented.
Other recommendations include:
Early disposal of assets and realisation to fastrack payment of uninsured deposits.
Ensuring that parties responsible for the failure of the closed bank are brought to face the dull wrought of the law.
Compelling banks to. comply with regulatory requirements such as the need to ensure that all customers have Biometric Verification Numbers(BVN).
To further improve capacity building and capabilities of staff through claims reimbursement simulation
