NDIC Empowers Agents To Recover Assets Of Over 600 Failed Banks

The Nigeria Deposit Insurance Corporation (NDIC) has disclosed that it is currently managing the assets of more than 600 failed financial institutions as part of efforts to safeguard depositors’ funds and strengthen confidence in the banking sector.

This was revealed at a sensitisation seminar for NDIC debt recovery agents held in Abuja on Thursday. The seminar, themed “Operationalising the Provisions of NDIC Act 2023 for Effective Debt Recovery,” focused on equipping agents with enhanced legal and operational tools under the new law.

Director in charge of Asset Management at NDIC, Patricia Okosun, said the corporation is overseeing assets from about 560 microfinance banks (MFBs) and 32 deposit money banks (DMBs), bringing the total to about 600 failed institutions. “Now, we have at date 560 something MFBs. We have 32 DMBs. By DMBs, we mean commercial banks. We’re talking about MFBs, microfinance banks. So in total, we have more than 600 failed institutions whose assets we are managing,” she said.

The director explained that the assets under management include both physical assets and risk assets, particularly loans and advances granted by the banks before they failed.

“What we are here for is actually the risk assets — the loans and advances that were given out when the banks were in operation. That is what the debt recovery agents seek to recover,” she said.

Okosun noted that when a bank fails, its assets are transferred to the NDIC, which then embarks on recovering outstanding loans to enable it to meet its statutory obligations to depositors.

“The loans are what we use to pay depositors after we have paid the insured sum. So we seek to recover all,” she stated.

She added that the seminar was organised to sensitise debt recovery agents on the expanded powers granted under the NDIC Act 2023, which can aid more efficient debt recovery.

According to her, one of the major challenges previously faced by agents was prolonged litigation and limited awareness of the Corporation’s legal powers.

“For instance, where there is a legal mortgage on collateral, the NDIC has powers to foreclose without going through the rigours that are presently common in court processes,” she said.

She explained that although some debtors resort to litigation to stall recovery, the Act provides the NDIC with specific powers to act decisively, especially where legal agreements have already empowered lenders to dispose of pledged assets in the event of default.

Okosun confirmed that the debt recovery agents operate on a commission basis, adding that the new sensitisation would enable them to better utilise the legal tools available to them.

Also speaking, the director of Legal Services at NDIC, Kushimo Oladipo Olafemi, said the seminar was aimed at educating agents on the comprehensive recovery tools embedded in the NDIC Act 2023.

He described the Act as a “full bouquet of recovery tools” designed to enhance debt recovery mechanisms and enable the Corporation to fulfil its mandate of deposit guarantee, including payment of uninsured deposits of failed banks.

Olafemi stressed that effective debt recovery is central to sustaining depositor confidence and financial system stability.

“If you put money in the bank and you know you will get it back, it ensures confidence. It promotes financial inclusion,” he said.

He added that strong depositor confidence enables banks to mobilise savings and lend to deficit sectors of the economy, thereby promoting commerce, manufacturing, job creation and overall economic growth.

He noted that the Abuja workshop was the second phase of the sensitisation programme, following an earlier session held in Lagos for agents in the southern region, while the current session targeted agents in the northern parts of the country.

According to him, the NDIC views the agents as partners in fulfilling its deposit guarantee mandate and intends to continue strengthening collaboration to ensure more effective debt recovery in the interest of depositors and the broader economy.