NDIC Set to Shut Down Nigerian Banks Over Default, Lists Cabals Responsible for Failure

• The NDIC is looking to shut down some banks that are not performing up to standard in Nigeria
• The Company said it is working on a winding-up rule that will allow the company to take down failing institutions
• It stated that it has successfully liquidated many banks in the past as instituted by the CBN

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market

Nigeria Deposit Insurance Company, NDIC has disclosed its plan to go after failing banks in the country.

Bello Hassan, its Managing Director said that the company will soon approach the Federal High Court for the issuance of the winding-up rules for failed deposit-taking institutions, under Section 56 of the NDIC Act 2023.

He made this known in Port Harcourt at a sensitization seminar organized for judges of national industrial courts and members of the investment and security tribunal according to Daily Trust.

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Payment made to claimants

Over the years, he said the corporation has successfully liquidated many Microfinance Bank (MFBs), Primary Mortgage Banks (PMBs) Deposit money Banks(DMBs).

He said the affected institutions were banks whose licenses were revoked by the CBN, and their depositors.

He added that the company ensured that claimants were paid, with some of them fully settled from debts recovered and the assets realized.

It could be recalled that Legit.ng reported that the NDIC began paying all depositors of banks affected by the recent license revocation instituted by the Central Bank of Nigeria (CBN).

Hassan in an earlier report said that the Corporation has refunded over 1.2 billion to about 34,000 depositors of the liquidated 179 microfinance banks whose licenses the Central Bank of Nigeria (CBN) revoked.

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Challenges faced

Hassan however pointed out some of the challenges the company encounters in the course of duty.

He also listed some of the challenges including difficulty in debt recovery and the attachment of the assets of the corporation (NDIC) including garnishment of the corporation’s accounts.

He blamed the difficulty in prosecuting Directors, Managers, and other bank officials for the fall of their banks.

According to Hassan, the lack of specialized winding-up riles for Failed Financial Institutions as provided for in Section 56(1) and (2) of the NDIC Act 2023 is another challenge that needs to be resolved.

Similarly, he listed cases by ex-staff of banks under liquidation on Labour law matters and issues relating to Stocks and Securities matters.

Despite these, however, he said the NDIC in collaboration with the CBN recorded huge achievements using various Resolution Options such as the Bridge Bank mechanism as well as the Purchase and Assumption option.

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"Come Now": NDIC Begins Customers' Verification of Failed Bank 20 Years Ago, Gives Instructions

The Nigeria Deposit Insurance Corporation (NDIC) has started verifying the insured depositors of Peak Merchant Bank in liquidation, Legit.ng reported.

This is in line with its duty of deposit guarantee and reimbursement of depositors in case of bank failure.

Peak Merchant Bank Limited's operating license was revoked on Friday, 28 February 2003.

Source: Legit.ng