The Nigeria Deposit Insurance Corporation (NDIC), on Friday, in Abuja marked its 30th anniversary, giving itself pass mark for its role as banking sector stabilizer over the period.
Speaking at the occasion, Umaru Ibrahim, its chief executive, said the corporation has in all of those years “fulfilled the public policy objectives for which it was established.”
During the period also, he said the NDIC successfully recovered debts and sold assets of deposit money banks in liquidation, which enabled it to pay over ₦116.258bn as liquidation dividends to depositors, creditors and shareholders of closed DMBs, MFBs and PMBs to date.
So far, he stressed that “through sustained and diligent liquidation activities, NDIC has realized assets to pay in full, deposits of the customers of 17 of the DMBs (in-liquidation). In effect, all the depositors of the 17 defunct banks who came forward to file their claims have been paid all their monies (both insured and uninsured) erstwhile trapped in those banks.”
He noted that the NDIC has ensured that depositors of liquidated banks suffered little loss or pain, following which in the 25 years since 1994, 53 DMBs, 325 MFBs, and 51 PMBs were liquidated without disrupting the nation’s payment system.
Specifically, he stressed that the corporation recovered debts and realized of assets of closed banks of over ₦29.112bn from debtors of DMBs in-liquidation; while ₦129.1m was recovered from debtors of failed Micro Finance Banks, while that of Primary Mortgaged Banks stood at N300m.
Also, a total of ₦21.502bn “was collected from the disposal of physical assets of closed DMBs, while N404.74 million and ₦78.17 million were realised in respect of MFBs and PMBs, respectively.”
The area of distress resolution in the nation’s banking industry, he continued, is one in which the NDIC continues to demonstrate great ingenuity and sagacity, given that at inception in 1989, “the banking system was already in distress with seven technically Insolvent state-owned banks.”
NDIC, he assured further, learnt invaluable lessons in its early years, adopting multiple resolution options to resolve system failures, depending on severity and peculiarity.
The options have ranged “from Open Bank Assistance (OBA), Purchase and assumption (P & A), Bridge Bank, and reimbursement (payout) of Insured Depositors.
“The NDIC used Purchase and Assumption (P & A) to resolve problems of 13 banks closed by the CBN in 2006 as a result of their inability to meet the Consolidation/Recapitalization requirement of N25 billion. The P&A option was adopted by the Corporation to resolve the problems of banks affected by the Global Financial Crisis of 2009, which manifested in poor Asset Quality and Weak Risk Management, as well as weaknesses in Corporate Governance.”
The corporation thereafter, in consultation with the Central Bank of Nigeria (CBN), followed this with the adoption of the Bridge Bank mechanism to resolve the failure of three DMBs- Afribank Nigeria, Spring Bank, and BankPHB in 2011. The option was also adopted in 2018 to resolve the failure of Skye Bank Plc.
The bridge bank option, he continued, has so far “safeguarded 12,667 jobs, protected deposit liabilities of over ₦1.759tr which ensured that depositors had uninterrupted access to their funds, and prevented the systemic repercussions of the failure of the bank on the entire financial system. The Bridge bank option engendered macro-economic stability sustained daily operations of the failed banks including meeting maturing obligations and enhanced the confidence of Depositors and other Stakeholders.”
To celebrate the milestone event, therefore, the NDIC boss said a series of activities have been lined up to celebrate its remarkable achievements and to honour its founders who left a legacy of excellence in service, which began with special anniversary prayers during the Juma’at Prayers at the National Mosque in Abuja on Friday, October 18, 2019.
This is to be followed on Saturday, October 19, 2019, staff of the corporation will engage in the promotion of health and wellness during the anniversary health walk and novelty football match with the Debt Management Office (DMO) staff.
This will be followed by a special anniversary thanksgiving service on Sunday, October 20, 2019, at the National Ecumenical Centre, Abuja; while anniversary public lecture/book presentation will be crowned by dinner later on Monday, October 21, 2019, among others.
He used the occasion to assure stakeholders “in the banking system in particular and the economy in general of its readiness, not only to sustain the high standard recorded but to raise its bar in line with our core values of Honesty, Respect & Fairness, Discipline, Professionalism, Teamwork and Passion.”
Photo caption: NDIC Director, Special Insured Institutions Department (SIID), J. J. Etopidiok (middle) responding to a question from the Press during NDIC’s 30th Anniversary Press Briefing, on Friday, October 18, 2019.