NDIC to recover N400b loans from liquidated banks

NDIC to recover N400b loans from liquidated banks

The Nigeria Deposit Insurance Corporation (NDIC) is expected to recover more than N400 billion from loans granted by liquidated deposit money banks.

Managing Director of the Corporation, Bello Hassan, said the it is employing the assistance of anti-graft agencies and the judiciary to fast-track the recovery because the payment of depositors of the liquidated banks is not negotiable.

Bello spoke in Owerri, Imo State yesterday while declaring open the 20th edition of the NDIC Finance Correspondents Association of Nigeria (FICAN) Workshop where he noted that NDIC has paid over N1.6 billion to over 40,000 depositors of the recently liquidated banks.

Stressing that NDIC is alive to its responsibilities to Nigerian depositors, Bello said one of the greatest challenges that NDIC is facing is debt recovery.

“A lot of customers of banks in liquidation that borrowed are not willing to repay those debts.

“I want to put it on record that those debts, although those loans that were granted were granted out of deposits of people that were collected in the banks, so it is only when those debtors pay back that NDIC will now be able to pay the depositors of those failed banks. That is one of the greatest challenges we are facing.

“The value of the debt we are about to recover if you take into account all the banks in liquidation, that is the DMBs, microfinance banks, the primary mortgage institution, this is a debt that is well beyond N400b and that is what we are expecting to recover so we can pay the depositors of those banks in liquidation,” Bello said.

“Already we have made substantial recovery and we have made some payments and that is why in the recent past, we have put our adverts that depositors of those failed banks should come forward so we can verify them in other to pay what we call liquidation dividends.

“Even for those banks that recently closed, we have also made substantial payments of the insured amounts as of today we have paid more than N1.6 billion to more than 40,000 depositors”.

According to him, even depositors who were unable to meet certain criteria during their bank registration exercise should exercise no worry as their deposit will not be in jeopardy.

“We have been calling depositors of those institutions especially those that did not have BVN attached to their files to come forward so we can verify them to pay them the insured amount.

“When we finish that, we have already commenced the valuation and assessments of assets by those banks in liquidation so that we can equally dispose of them and first of all pay the liquidation dividends which are over and beyond the insured amount.

“So we are using this as a medium to call on depositors of those banks to come forward to our office in Abuja, Lagos, and across the six geo-political zones to be verified to pay them the verified amount”.

Bello said the collaboration of the anti-graft agencies and the judiciary is critical to the recoveries made by the corporation.

Saying that litigations often slow down the corporation in dispensing with cases before it, Bello noted, “Our request to the government is for the government to assist us in making sure that we expedite the litigation process.

“If there’s a way we can bring in the stakeholders, the legislature, the Judiciary together so that anytime we take our decisions and cases before the court, cases are given expedited hearing so that justice can be dispensed.

He also stated that the imminent recapitalization of banks announced by the Central Bank of Nigeria (CBN) is the right step as it is healthy for the economy that is aiming to absorb over $1 trillion in Gross Domestic Product (GDP)

He said the NDIC is awaiting further direction over the recapitalization, “It’s important for us to wait and see the clear direction of what that requirement is going to be and how many levels of capitalization will be required.

“I know as we speak, when you look at the performance of the industry, it’s very sound in looking at the key financial soundness indicators of capital adequacy, liquidity, earnings, and quality of assets but certainly the government is trying to grow our GDP to $1 trillion, we will also need bigger banks to be able to play in that space and I believe that it’s within that context that the CBN is looking at capitalizing those banks, so we await the CBN for further details on this process”, he added.