NDIC Protects N1.759 Trillion Depositors’ Funds Through Bridge Banks, Marks 30th Anniversary

NDIC Director, Communication & Public Affairs, Dr. Sunday Oluyemi representing the Managing Director, Umaru Ibrahim, addresses Press conference marking NDIC’s 30th Anniversary celebration. He is flanked from L-R by the Director, SIID and Director, AMD.

The Nigeria Deposit Insurance Corporation (NDIC) has to date, through Bridge Bank mechanism safeguarded 12, 667 jobs ought to have been lost and protected over N1.759 trillion depositors’ funds from being trapped in distressed banks.

The Managing Director of NDIC, Umaru Ibrahim, made the disclosure while enumerating the achievements of the corporation within the last 30 years of its operations in a press conference announcing activities marking its anniversary.

He said the corporation has in collaboration with the Central Bank of Nigeria (CBN) relied on multiple resolution options to resolve failures in banking system. The options include: Open Bank Assistance (OBA), Purchase and Assumption (P &A), Bridge Bank and reimbursement (pay out) of insured depositors.

According to the NDIC Managing Director who was represented by the Director, Communications and Public Affairs, Dr. Sunday Oluyemi and other directors, “The NDIC used   Purchase and Assumption (P & A) to resolve problems of 13 banks closed by the CBN in 2006 as a result of their inability to meet the Consolidation/Recapitalization requirement of
N25 billion. The P&A option was adopted by the Corporation to resolve the problems of banks affected by the Global Financial Crisis of 2009, which manifested in poor Asset Quality and Weak Risk Management, as well as weaknesses in Corporate Governance.

“Furthermore, in the discharge of its statutory role under Section 39 (i) of the NDIC Act 16 of 2006 and in consultation with the CBN, the Corporation adopted the Bridge Bank mechanism to resolve the failure of three (3) DMBs namely Afribank, Spring Bank and BankPHB in 2011.

“Similarly, in 2018, that mechanism was used to resolve the failure of Skye Bank Plc. Indeed, the merits of the bridge bank to the nation’s economy are numerous.

“It should interest you to note that the bridge bank initiative safeguarded 12,667 jobs, protected deposit liabilities of over ₦1.759 trillion which ensured that depositors had uninterrupted access to their funds, and prevented the systemic repercussions of the failure of the bank on the entire financial system.

“The Bridge bank option engendered macro-economic stability, sustained daily operations of the failed banks including meeting maturing obligations and enhanced the confidence of Depositors and other Stakeholders.”

In respect of Bank liquidation, Ibrahim said between 1994 to date, 53 DMBs, 325 MFBs and 51 PMBs were put under liquidation without disruption to the nation’s payment system.

Giving statistics, he listed that to date, a cumulative amount of over ₦29.112 billion was recovered from debtors of DMBs in-liquidation; ₦129.10 million was realized from debtors of failed MFBs, while that of PMBs stood at N300 million.

On realisation of assets, he said currently ₦21.502 billion was collected from the disposal of physical assets of closed DMBs, while N404.74 million and ₦78.17 million were realised in respect of MFBs and PMBs, respectively.

Further, he said debt collection and assets sales culminated in the payments of over ₦116.258 billion as Liquidation Dividends to Depositors, Creditors and Shareholders of closed DMBs, MFBs and PMBs as at today.

Concerning the Corporation’s deposit guarantee, he said to date, the NDIC has paid a cumulative sum of over ₦8.25 billion as insured amount to 442,999 depositors of closed DMBs; paid over ₦2.97 billion to 83,415 depositors of closed MFBs, and over ₦70.53 million was paid to 869 depositors of closed PMBs.

On the activities marking the Corporation’s 30th Anniversary celebration, the Managing Director said it includes: Special Anniversary prayers during the Juma’at Prayers at the National Mosque in Abuja Friday, 18th October, 2019; On Saturday, 19th October, 2019, Anniversary Health Walk and Novelty Football Match between the Corporation and Debt Management Office (DMO) staff;  Special Anniversary Thanksgiving Service on Sunday, 20th October, 2019, at the National Ecumenical Centre, Abuja.

The climax of the Anniversary celebrations will be the NDIC 30th Anniversary Public Lecture/Book Presentation at Transcorp Hilton and Anniversary Dinner later in the evening on Monday, 21st October, 2019.