NDIC pays N9bn to 608,333 depositors

 Nigeria Deposit Insurance Corporation (NDIC) yesterday disclosed that about N9.5 billion has been paid to 608,333 depositors in 234 liquidated financial institutions as at August 31, 2014 whereas a cumulative sum of N93.646 billion was paid as liquidation dividends to 250,497 uninsured depositors within the same time.Making the disclosure at a press conference in Abuja as part of activities marking the 25th anniversary of the corporation, the Managing Director/Chief Executive of NDIC, Alhaji Umaru Ibrahim, said, “a cumulative amount of N6.825 billion was paid to 528,277 insured depositors of 48 Deposit Money Banks (DMBs) in liquidation as at August 31, 2914, while for the 186 closed Micro-Finance Banks (MFBs), a cumulative amount of N2,756 billion had been paid to 80,059 verified depositors as at August 31, 2014,” he stated.

For the agent banks’ payment, Ibrahim explained that the corporation has introduced the use of agent banks for payments to claimants to ensure that pay-out processes are further eased and periods shortened.

“Reconciliation of accounts of liquidated banks is undertaken monthly to serve as internal control and ensure that funds of liquidated banks are accounted for by each bank. In order to provide up to date information to stakeholders in the financial services sector, particularly sister regulatory agencies, the board and management approved the development of an electronic database on debtors of failed banks,” he said.

According to him, NDIC was established in March 1989, following the promulgation of Decree Number 22 of 1988 now repealed with NDIC Act 16 of 2005, adding that its mission was to protect depositors and contribute to the stability of the financial system through effective supervision of insured institutions, provision of financial/technical assistance to eligible institutions.

The corporation also ensures payment of guaranteed sums and orderly resolution of failed insured financial institutions.

On deposit guarantee, Umaru said the maximum deposit insurance coverage was increased from its set level of N50,000 at inception to N200,000 in 2006 and subsequently to N500,000 and N200,000 in 2010 for DMBs, while deposit insurance was similarly extended to microfinance banks/primary mortgage banks in 2006 with a coverage level of N100,000, which was increased to N200,000 in 2010.

Following the rollout of regulatory framework for mobile payment services in Nigeria, which is aimed at revolutionising the Nigerian payment system, the corporation said it has extended deposit insurance to the individual subscribers of licensed 24 Mobile Money Operators.

“You will recall the roll out of the regulatory framework for mobile payments services in Nigeria, which aimed at revolutionising the Nigerian payment system in tune with global developments as well as facilitating financial inclusion in the country.

The development has led to the licensing of 24 Mobile Money Operators (MMOs). In order to engender confidence of the public in subscribing the products of the MMOs, the NDIC has considered as imperative the extension of deposit insurance to the individual subscribers of the MMOs in the form of pass-through deposit insurance. The framework for making the pass-through insurance scheme operational is currently being finalised by the corporation,” the NDIC chief remarked.