Failed Banks: NDIC Assures Depositors of Full Compensation

• Failed Banks: NDIC Assures Depositors of Full Compensation

The Managing Director, Nigeria Deposit Insurance Corporation, Mr Umaru Ibrahim, has said that it will soon commence claims payment to depositors of failed microfinance banks and primary mortgage banks.

He said at the ongoing Lagos Trade Fair, ‘Sadly, as you are all aware, the Central Bank of Nigeria recently revoked the licences of 154 MFBs and six PMBs due to their insolvency. The action became necessary due to erosion of their capital base, poor liquidity, inept management, as well as some insiders helping themselves with loans they never intend to pay back, and further worsened by boisterous lifestyle of management that remained at variance with the philosophy of microfinance banking operations.

“The NDIC has commenced verification of insured depositors and will soon start paying the verified claims to appropriate depositors in fulfilment of our core mandate. From the record obtained so far, majority of the depositors, especially in the MFBs, have less than N200,000 in their accounts, which implied that the NDIC will hopefully cover 100 per cent of the deposited funds in the MFBs.”

To further enhance financial system stability in subsequent periods, and forestall the reoccurrence of disappointments, he said the NDIC had embarked on various public awareness campaigns, explaining the roles and responsibilities of the customers to their banks, and vice versa.