BusinessNDIC Boss Reiterates Commitment To Financial Service Stability

NDIC Boss Reiterates Commitment To Financial Service Stability

THEWILL APP ADS

Date:

THEWILL APP ADS 2

September 27, (THEWILL) – The Managing Director/CEO of the Nigeria Deposit Insurance Corporation (NDIC), Mr. Bello Hassan, has re-emphasised the commitment of the Corporation towards ensuring financial service stability in the country.

He also noted that the Corporation would remain steadfast in the pursuit of its mandate to protect depositors’ assets in collaboration with the Central Bank of Nigeria (CBN) to ensure economic growth.

Hassan made this disclosure on Thursday, during his keynote address at the ongoing 2024 NDIC Business Editors and Finance Correspondents Association of Nigeria (FICAN) Workshop in Lagos, with the theme, “Strengthening Nigeria’s financial safety-net: The Role of Deposit Insurance”.

He said confidence is key in the maintenance of financial system stability and the role of deposit insurance cannot be overemphasised. According to him, as one of the safety nets, it reassures depositors, thereby instilling trust in the banking system and preventing bank runs during times of uncertainty.

“Over the years, the NDIC has been instrumental in promoting stability by ensuring that when banks fail, depositors are protected, and their funds are reimbursed promptly.

“The recent closure of Heritage Bank, following the revocation of its license by the CBN on June 3, 2024, underscores the NDIC’s critical role in safeguarding depositors.

“Acting in accordance with the relevant provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020 and the NDIC Act 2023, the NDIC was appointed liquidator to manage the orderly resolution of the bank and oversee the payment of its depositors and other claimants,” he said.

Speaking further, Hassan said in discharging this critical role of depositor reimbursement, the Corporation began the payment of the insured deposits of N5 million maximum per depositor within a record time of four days of the bank’s closure.

This, he said, was achieved using Bank Verification Numbers (BVN) as a unique identifier to locate depositors’ alternate accounts in other banks without the need to fill out forms or visit the NDIC offices.

“This innovative approach has indeed enabled the payment of 84.98 per cent of depositors with BVN-linked accounts to date. The prompt payment of depositors, coming at a time when the Corporation had also recently increased the deposit insurance coverage from N500,000 to N5 million in Deposit Money Banks, significantly cushioned the negative impact of bank failure, especially during the current challenging economic climate,” he said.

Hassan maintained that this achievement was consistent with the provisions of the International Association of Deposit Insurers (IADI) Core Principle 15, which emphasises timely payouts to depositors of failed banks.

The NDIC boss said having largely reimbursed depositors their insured deposits, the Corporation is committed to ensuring that depositors with balances exceeding N5 million are also paid the balance of their deposits, adding that these uninsured deposits represent a significant portion of the total deposits in Heritage Bank.

He informed that the Corporation is already working assiduously to ensure that all depositors with amounts in excess of the maximum insured amount of N5 million are paid through liquidation dividends from the realisation of the defunct bank’s assets and recovery of debts.

Hassan said the Corporation had already initiated the process of debt recovery and realisation of investments and physical assets of the defunct bank to ensure timely payment of the uninsured deposits of the defunct bank.

He also said the NDIC’s responsibilities extend to the creditors of the defunct bank, who will receive payments after all depositors have been fully reimbursed, noting that this orderly process, based on asset realisation and priority of claims, is essential in maintaining public trust in the banking system and promoting financial stability.

“The handling of the Heritage Bank liquidation illustrates the broader role of the NDIC in ensuring that even in times of financial disruption, depositors can be rest assured that their funds are protected,” he noted.

He lauded the financial journalists’ commitment to educating the public on the vital role of the NDIC in ensuring the stability of Nigeria’s financial system.

Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

THEWILL APP ADS 2
Sam Diala, THEWILLhttps://thewillnews.com
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

More like this
Related

NPFL Sets Ultimatum For Clubs To Resolve Financial Disputes

October 10, (THEWILL) – The Nigerian Professional Football League...

US Govt Fines Canadian TD Bank $3bn Over Failure To Monitor Drug Cartel Money Laundering

October 10, (THEWILL) – The United States Government has...

You Lack Capacity To Bring Down Military Helicopter – DHQ Challenges Ex-Niger Delta Militant Leader Dokubo

October 10, (THEWILL) – The Defence Headquarters (DHQ) has...