The Nigeria Deposit Insurance Corporation has reiterated the Corporation’s commitment to ensuring financial stability through the role of deposit insurance.
The Managing Director and Chief Executive Officer of the NDIC, Bello Hassan, made this pledge during his keynote address at the 2024 NDIC Business Editors and Finance Correspondents Association of Nigeria workshop, on Thursday in Lagos.
In his address to the distinguished gathering, which included members of the Association of Business Editors in Nigeria, FICAN from the Lagos and Abuja chapters, civil society leaders, and corporate affairs managers of banks, Hassan expressed delight in engaging with this esteemed group of professionals.
He lauded their commitment to educating the public on the vital role of the NDIC in ensuring the stability of Nigeria’s financial system.
Speaking on the theme of the workshop, “Strengthening Nigeria’s Financial Safety-Net – The Role of Deposit Insurance,” Hassan noted that the topic was timely, given the ever-evolving dynamics of the global financial system.
He emphasised that the NDIC remains resolute in its mission to protect depositors and collaborate with the Central Bank of Nigeria to safeguard the stability of the banking sector.
“As our financial system continues to evolve and face new challenges, the NDIC remains steadfast in its mission to protect depositors,” Hassan stated.
Highlighting the achievements of the NDIC over its three-decade existence, Hassan pointed out that the Corporation’s core mandate includes providing deposit insurance cover, supervising insured financial institutions, resolving distressed banks, and ensuring orderly resolutions in the event of bank failures.
He further noted that confidence in the banking system is crucial, stating, “Confidence is key in the maintenance of financial system stability, and the role of deposit insurance cannot be overemphasised.”
One of the key points of discussion was the recent closure of Heritage Bank, which had its license revoked by the CBN in June 2024.
The NDIC, acting in accordance with the Banks and Other Financial Institutions Act 2020 and the NDIC Act 2023, was appointed liquidator to manage the orderly resolution of the bank.
Hassan highlighted the Corporation’s swift action in reimbursing depositors, noting that insured deposits of up to ₦5 million per depositor were paid within four days of the bank’s closure.
This was achieved through the innovative use of Bank Verification Numbers to locate depositors’ alternate accounts without the need for form-filling or visits to NDIC offices.
“The prompt payment of depositors, coming at a time when the Corporation had also recently increased the deposit insurance coverage from ₦500,000 to ₦5 million, significantly cushioned the negative impact of bank failure, especially during the current challenging economic climate,” he remarked.
Hassan reassured the audience that the NDIC is committed to ensuring that depositors with balances exceeding the insured limit of ₦5 million are also paid the balance of their deposits through liquidation dividends from the realisation of the bank’s assets.
He emphasised that the Corporation has already initiated the process of debt recovery and asset realisation to facilitate the timely payment of uninsured deposits.
In addition to depositors, the NDIC’s responsibilities extend to the creditors of the defunct bank.
“Creditors will receive payments after all depositors have been fully reimbursed,” Hassan explained, underscoring the NDIC’s role in maintaining public trust and promoting financial stability during times of disruption.
Before concluding, Hassan recognised the indispensable role of the media, civil society groups, and corporate affairs managers of banks in advocating for the deposit insurance system.
He commended their efforts in raising awareness about the NDIC’s activities, which have strengthened public trust in Nigeria’s banking system.
“By working together, we can continue to build a more resilient financial system that protects the interests of all stakeholders,” he concluded.
The two-day workshop aims to deepen participants’ understanding of the NDIC’s role and provide insights into how the Corporation continues to safeguard Nigeria’s financial system amidst global and domestic challenges.
The event, which promises engaging discussions, marks another milestone in the NDIC’s efforts to ensure a robust and stable financial safety-net in Nigeria.
