The Nigerian Deposit Insurance Corporation (NDIC) has announced a strengthened partnership with the judiciary aimed at expediting the prosecution of failed financial institutions. NDIC Managing Director Bello Hassan revealed this initiative on Monday during the 19th Abuja International Trade Fair, themed “Mobility: Options for Transport, Trade Finance, and Taxation.”
Hassan highlighted that this collaboration has successfully resolved long-standing cases, allowing the NDIC to declare 100 percent liquidation dividends to uninsured depositors of over 20 closed banks. He emphasized the critical role of deposit insurance in maintaining financial stability, ensuring that depositors are promptly compensated when banks fail, in accordance with the Banks and Other Financial Institutions Act 2020 and the NDIC Act 2023.
Amid rising concerns over bank failures, stakeholders are increasingly demanding legal accountability from board directors involved in these collapses. Hassan reassured customers that the NDIC is actively addressing the issue of impunity among bank board members and has taken steps to prosecute those responsible for the failures.
“The importance of deposit insurance cannot be overstated in a financial system where confidence is essential. It acts as a safety net that reassures depositors, builds trust in the banking system, and helps to prevent bank runs during periods of uncertainty,” Hassan stated.
He noted the NDIC’s success in implementing Alternative Dispute Resolution mechanisms to enhance liquidation activities and improve debt recovery. Discussing the payment of insured deposits related to the recent closure of Heritage Bank, Hassan revealed that the NDIC has successfully compensated 84.98 percent of depositors with Bank Verification Number (BVN)-linked accounts.
“In a significant achievement, NDIC began payments within four days of Heritage Bank’s closure. By using depositors’ BVNs as unique identifiers, the corporation was able to efficiently identify alternate accounts and directly credit insured amounts of up to N5 million,” he explained.
The President of the Abuja Chamber of Commerce and Industry, Emeka Obegolu, praised the NDIC’s commitment to safeguarding depositors and strengthening the banking system, underscoring its vital role in fostering economic growth and facilitating trade and investment.
“The NDIC has been a critical player in safeguarding depositors, promoting confidence in our banking system, and ensuring the soundness of the financial sector,” Obegolu remarked. He highlighted the importance of a stable financial system for efficient movement of goods, services, and capital, which are essential for national development.
