The Nigeria Deposit Insurance Corporation (NDIC) is set to embark on a robust campaign to recover a staggering N400 billion owed to failed banks, according to the Managing Director and Chief Executive Officer, Bello Hassan. The announcement was made during the 20th workshop for business editors and finance correspondents in Owerri on Tuesday, November 28, 2023.
Hassan emphasized that debt recovery poses a significant challenge to the corporation’s deposit insurance operations, hindering the smooth payment of many depositors of liquidated banks. He revealed that most debtors of failed banks are unwilling to repay their loans, which were granted from the deposits collected by the banks.
The NDIC plans to leverage the revised NDIC Act of 2023 to expedite the debt recovery process. Hassan highlighted that the powers granted by the Act will be utilized to ensure the corporation recovers a substantial amount of the N400 billion owed by various entities, including commercial banks, microfinance banks, and primary mortgage institutions.
Speaking at the workshop, Hassan stated, “So, it is only when those debtors pay back that the NDIC can now pay the depositors of those failed banks. And that is one of the most significant challenges that we’re facing. Luckily enough, there is a review in the 2023 NDIC Act, and a lot of powers have been given to the corporation to expedite this process. We hope to leverage that to ensure we recover more to pay those depositors.”
Hassan noted that a significant portion of the N400 billion debt has been recovered, with affected depositors already receiving payments. However, the NDIC is urging depositors of failed banks without Bank Verification Numbers (BVNs) to undergo verification processes to access their insured deposits.
As part of its duties, the NDIC has also disbursed over N1.6 billion to 40,000 depositors of failed banks. Hassan emphasized the importance of verifying depositors without BVNs to facilitate the payment of insured sums. The NDIC is actively addressing challenges related to the payment of insured deposits and enhancing the overall stability of the banking sector.
In addition to debt recovery efforts, Hassan discussed the Central Bank of Nigeria’s planned recapitalization of the banking sector, emphasizing the need for larger banks to support the government’s agenda of growing the Gross Domestic Product (GDP) to beyond $1 trillion.
The NDIC’s commitment to debt recovery aligns with its ongoing efforts to strengthen the financial system and protect the interests of depositors in the face of economic challenges.
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