NDIC Explains Why Depositors Of Savannah Bank, Union Homes, Others Not Yet Paid

Mohammed Ibrahim

By CLEMENT NWOJI, Abuja

The Nigeria Deposit Insurance Corporation (NDIC) has explained that the non-amendment of its Act is inhibiting it from intervening to pay off the depositors of Savannah Bank, Union Homes, Aso Savings and others.

The Managing Director of NDIC, Umaru Ibrahim, maintained that unless the enabling Act of the Corporation was speedily amended, the Corporation was handicapped in acting to end the plight of depositors of the institutions.

Ibrahim spoke while receiving the Senate Committee on Banking, Insurance and Other Financial Institutions led by its Chairman, Sen. (Dr.) Rafiu Adebayo Ibrahim at the Corporation’s office, Abuja who were on oversight function.

This is even as the Committee expressed strong Commitment for the accelerated amendment of the Nigeria Deposit Insurance Corporation (NDIC) Act, 2006, to eliminate the gaps that have hindered the full realization of the public policy objectives of the implementation of the Deposit Insurance System (DIS) in Nigeria.

Using the case of Savanah bank as an example, the NDIC Managing Director said that the NDIC Act, as presently enacted, inhibits the Corporation to reimburse depositors since their bank licences were yet to be revoked due to protracted litigation.

The NDIC boss thereafter made appeal to the Committee to amend the NDIC Act.

He further updated the Committee on the recent activities of the Corporation including the response of the NDIC to the revocation of the licences of 153 Micro-Finance Banks (MFBs) and 6 Primary Mortgage Banks (PMBs), by the Central Bank of Nigeria (CBN).

According a statement by the NDIC Head of Communications and Public Affairs Unit, Mohammed Kudu Ibrahim, members of the Committee were informed that the Corporation had already commenced the payment of depositors of 25 MFBs and the deposits verification of 50 others.

He listed the challenges encountered by MFBs in particular to include non-performing loans, insider credit and abuse, non-compliance with extant regulations on their establishment and the overbearing indulgence in other fringe operations, along with poor earnings.

He stressed the strong resolve and commitment of the Corporation to assist in the investigation and prosecution of all those who contributed to the collapse of the defunct Skye Bank.

Responding, the Chairman of the Committee commended the Corporation for the excellent quality of its reports on the supervision of banks which have become the benchmark in the industry.

The chairman however expressed concerns over the recent policy of the CBN which raised the minimum capital requirements for Microfinance Banks in Nigeria from N20 million to N200 million, and N100 million to NI billion, and N2 billion to N5 billion for unit, state, and national MFBs respectively, adding that the policy will be inimical to the objectives of the financial inclusion strategy.

The meeting ended with both institutions pledging to work harmoniously to confront emerging issues in the industry such as Block-chain Technology, Financial Inclusion, Cyber Crime, Digital Banking, Consumer Protection and the provision of credits to MSMEs.