NDIC approves N258.8b to settle failed bank depositors

The Nigeria Deposit Insurance Corporation (NDIC) said it has set aside N258.767 billion in the 2019 fiscal year for the payment of depositors in the unlikely event of closure of licensed banks.

Speaking during the presentation of details of its budget before the House   of Representatives Committee on Insurance and Actuarial Matters, its  Managing Director, Umaru Ibrahim, who gave a breakdown of the funds, said N109.686 billion was provided for depositors of Deposit Money Banks (DMBs), while N149.081 billion has been set aside for depositors of Primary Mortgage Banks (PMBs) and Micro Finance Banks (MFBs).

He said the estimates were consistent with the Corporation’s mandate of providing financial guarantee to depositors of failed banks towards promoting public confidence in the banking sector. This, he added, is critical to the sustenance of the stability of the entire financial system.

In fulfillment of the Corporation’s mandate to provide technical assistance to licensed banks, the NDIC chief, said the Corporation, in collaboration with the Central Bank of Nigeria (CBN), has invested in the acquisition of a new software called the Integrated Regulatory Solution (IRS) for a more robust surveillance and supervision of insured financial institutions in the country. According to Ibrahim, the software will enable DMBs generate real time online data among themselves, help regulators to access data online from the DMBs.

Ibrahim also said the National Association of Microfinance Banks Unified Information Technology Platform (NAMBUIT) was introduced by CBN/NDIC and Association of MFBs to enhance the operational capacity of the MFBs. The CBN/NDIC is financing the project in the ratio of 60/40 per cent respectively in view of the importance of the project to the growth of the MFB sub-sector.

On the issue of NDIC’s mandate of providing financial assistance to eligible licensed and insured banks, Ibrahim said N140 billion was provided for DMBs while N300 million was provided for Microfinance and Primary Mortgage Banks. He urged the banks to take the opportunity to access the funds offered by the Corporation whenever they are required.

Responding, the Committee Chairman, Olufemi Fakeye commended the Corporation for its pro-activeness in the prevention systemic crisis in the nation’s banking system.

He added that the various mechanisms adopted by the Corporation since inception to resolve distress in banks had not only prevented the manifestation of crisis in the system, they have also contributed immensely to the high level of public confidence experienced in the financial sector.

 

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