In a keynote address delivered at the 2024 NDIC Title Editors Forum in Lagos, Mr. Bello Hassan, OON, FCA, FCIB, Managing Director/Chief Executive Officer of the Nigeria Deposit Insurance Corporation (NDIC), reflected on the pivotal strides the Corporation has made over its three-and-a-half-decade journey. Speaking to a distinguished audience of editors and media professionals, Mr. Hassan emphasized the NDIC’s role in ensuring financial stability and depositor protection in Nigeria, with a spotlight on recent milestones and challenges.
Foundation of Confidence
Since its establishment, the NDIC has been an unwavering pillar in Nigeria’s financial safety net. The Corporation’s core mandates—deposit insurance, bank supervision, distress resolution, and depositor reimbursement—have underpinned its efforts to foster public trust in the banking system. Mr. Hassan highlighted the NDIC’s ability to provide swift and effective depositor protection during times of uncertainty as a testament to its unwavering commitment to financial stability.
Timely Reimbursements and Heritage Bank’s Resolution
A recent example of the NDIC’s critical role was the resolution of Heritage Bank following its license revocation by the Central Bank of Nigeria in June 2024. Within an unprecedented four days of the bank’s closure, the NDIC commenced reimbursement of insured deposits, capped at ₦5 million per depositor, leveraging Bank Verification Numbers (BVN) to locate alternate accounts and streamline payouts.
This innovative approach aligns with international best practices, notably the Core Principles of the International Association of Deposit Insurers (IADI), which emphasize prompt reimbursement to depositors. The swift action not only alleviated depositor distress but also underscored the Corporation’s operational efficiency and commitment to its stakeholders.
Enhanced Deposit Insurance Coverage
Another transformative milestone was the NDIC’s increase in deposit insurance coverage from ₦500,000 to ₦5 million for Deposit Money Banks. This enhancement has significantly reduced the negative impact of bank failures on depositors, reinforcing public confidence in the financial system.
Addressing Uninsured Deposits and Asset Realization
Beyond insured deposits, the NDIC has embarked on a meticulous process to reimburse uninsured depositors and creditors of defunct banks. Efforts to recover debts and realize investments and physical assets of Heritage Bank are already underway, ensuring the payment of liquidation dividends to depositors with balances exceeding ₦5 million.
This orderly process, based on asset realization and claims prioritization, highlights the Corporation’s dedication to transparency and fairness while maintaining public trust in Nigeria’s banking system.
Overcoming Challenges and Strengthening Partnerships
Mr. Hassan acknowledged challenges in reconciling depositor records, resolving inconsistencies, and addressing BVN-related issues. He urged depositors to comply with Know Your Customer (KYC) regulations to facilitate smoother transactions and expedite future reimbursements.
Expressing gratitude for the longstanding collaboration with the media, Mr. Hassan commended their role in educating the public on financial matters and amplifying the NDIC’s contributions to financial stability. He encouraged continued engagement, underscoring the media’s vital role in fostering public trust and supporting the Corporation’s objectives.
Looking Ahead
The NDIC remains steadfast in its mission to safeguard depositor funds and uphold financial system stability. As the global financial landscape evolves, the Corporation’s innovative strategies and proactive policies position it as a key player in Nigeria’s economic resilience.
With a renewed commitment to transparency, efficiency, and collaboration, the NDIC sets the stage for a future where depositor confidence is unwavering, and the Nigerian banking system thrives as a cornerstone of national development.
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