In a bid to address the significant challenge of debt recovery in the Nigerian banking sector, the Nigeria Deposit Insurance Corporation (NDIC) has announced its readiness to initiate the recovery of over N400 billion owed to failed banks by debtors. Bello Hassan, the Managing Director and Chief Executive Officer of NDIC, highlighted the urgency of the debt recovery process during the opening of the 20th workshop for business editors and finance correspondents in Owerri.
Hassan emphasized that debt recovery is crucial for the smooth payment of depositors of liquidated banks, revealing that a substantial portion of the debts owed, over N400 billion, includes amounts owed to commercial banks, microfinance banks, and primary mortgage institutions.
The NDIC boss acknowledged the reluctance of debtors to repay loans, stating, “A lot of customers of banks in liquidation that borrowed are not willing to repay those debts. And I want to put it on record that those debts or loans were granted out of deposits of people that the banks collected.”
To expedite the debt recovery process, Hassan indicated that the corporation would leverage the powers granted by the revised NDIC Act of 2023. He expressed optimism that these enhanced powers would enable NDIC to recover more funds and facilitate the payment of depositors.
While Hassan reported a significant recovery and payments made to affected depositors, he urged depositors without Bank Verification Numbers (BVNs) to undergo verification to access their insured deposits. He revealed that NDIC had disbursed over N1.6 billion to 40,000 depositors and encouraged others to come forward for verification.
Addressing the Central Bank of Nigeria’s (CBN) planned recapitalization of the banking sector, Hassan noted that larger banks are essential to participate adequately in the proposed $1 trillion economy outlined by President Bola Tinubu’s government. He stressed the necessity of stronger financial institutions to contribute effectively to the government’s agenda of growing the Gross Domestic Product (GDP) beyond $1 trillion.
In conclusion, Hassan clarified that there were no new failed banks in Nigeria, dispelling social media reports suggesting otherwise. The NDIC continues its duty of deposit guarantee and reimbursement of depositors, recently initiating customer verification for depositors of Peak Merchant Bank in liquidation, in line with its commitment to ensuring financial stability.
