NDIC Pays Off 86% Of Total Insured Deposits

The Nigeria Deposit Insurance Corporation (NDIC), has said it has disbursed 86 per cent of the total insured deposits to customers of failed banks, including Heritage Bank, an increase from the 82.36 per cent reported just a week ago.

Managing director and chief executive of the corporation, Hassan Bello, while speaking at a retreat for the House Committee on Insurance and Actuarial Matters of the Federal House of Representatives in Lagos noted that the 14 per cent unpaid had been due to accounts without bank verification number (BVN) or had post no debit (PND) on them.

Stating that the Corporation recognizes the importance of timely reimbursement to depositors in maintaining financial stability, he explained that BVN of depositors had been sourced from the Nigeria Inter Bank Settlement System (NIBSS) to enable it make payments.

“The Corporation had reassessed its depositor payment methodology with a view to adopting a different approach that will ensure prompt payments to depositors. This was tested in the recent payment to depositors of Heritage bank in-liquidation. It is instructive to mention that, the Corporation using the BVN of depositors obtained from NIBSS was able to access alternate accounts of customers and commenced payment to depositors within a record time of four days.

“This was quite a significant milestone when compared with a historical period that usually takes longer time. Cumulatively, as at today, the NDIC has paid 86 per cent of the total insured deposits. The Corporation is making efforts to complete the payments of the remaining 14 per cent of the insured deposits.

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“Some of the insured depositors constituting these remaining 14 per cent are customers whose accounts have post no debit (PND) instructions by courts or regulatory authorities. Others are those with KYC limitations on the maximum lodgement per day, customers with no BVN attached to their accounts or have not come forward for verification to provide alternate accounts in other banks to enable the Corporation to pay them.

“Notwithstanding the success recorded in payment of insured sums to depositors of the defunct heritage bank, the Corporation is mindful of the uninsured depositors and we have therefore initiated the process of debt recovery and realisation of investments and physical assets of the bank to ensure timely reimbursement of uninsured deposits.

“It is pertinent to remind us here that upon payoff of both insured and uninsured deposits, the Corporation will subsequently proceed with the payment of creditors and others in accordance with priority of claim as provided in the extant law.

Meanwhile, Chairman of the House Committee on Insurance and Actuarial Matters, Hon. Ahmadu Usman Jaha, emphasised the critical need for robust financial stability measures, citing global economic shifts and unforeseen crisis.

Speaking at the event themed “Strengthening Financial Stability and Deposit Insurance Frameworks for Economic Resilience”, Jaha emphasised the need for collaboration between governmental bodies, financial institutions, and stakeholders to ensure that regulations are not only comprehensive but also adaptable to evolving economic conditions.

“In recent years, we witnessed various challenges that threatened the resilience of our financial systems-global economic shifts, regulatory challenges, and the impacts of unforeseen crises. These challenges underscore the critical need for robust deposit insurance frameworks that protect depositors and foster confidence in our banking systems.

“A resilient economy is one that can withstand shocks and continue to thrive. As we work to fortify our deposit insurance schemes, we must also address broader economic factors that contribute to resilience. This includes promoting financial literacy among the populace, encouraging savings, and ensuring that our citizens understand the importance of deposit insurance. More so, we must leverage technology to improve our systems, making them more resilient against potential disruptions if we must strengthen our financial stability” he said.