It is my pleasure to stand before you today on the occasion of the Nigeria Deposit Insurance (NDIC) Special Day at the 2013 Niger Delta Trade Fair holding in this historic City of Benin Kingdom. The participation of the Corporation in this edition of the fair is informed by our commitment to reaching out to our various stakeholders in our quest to enhance public awareness on the NDIC mandate and activities to the doorstep of the people of the South-South geo-political zone of the country. The Corporation has been participating in the Lagos, Kaduna and Enugu International Trade Fairs every year. Happily, trade fairs bring together various stakeholders from different sectors of the economy to discuss and find ways of promoting investment and business opportunities in Nigeria. I would therefore like to commend the foresight of the organisers of this trade fair and the Edo State Government for aligning these efforts toward the economic development of the South-South Zone as aptly captured in the theme of the fair: Niger Delta…Nigeria’s Goose that Lays the Golden Egg.
Distinguished ladies and gentlemen, the NDIC was established by the Federal Government under the NDIC Decree 22 of 1988 repealed and replaced by NDIC Act No. 16 of 2006 to insure deposit liabilities of licensed banks and other deposit-taking financial institutions in Nigeria. The key mandate of the Corporation is to provide deposit guarantee to depositors of insured financial institutions by providing a mechanism for their reimbursement in the event of imminent or actual failure of any insured bank. The Deposit Insurance System (DIS) in Nigeria was designed as “risk minimizer” as it is not only concerned with depositors reimbursement but also in the supervision of the books and affairs of the insured banks. By this, therefore, the NDIC plays a crucial role towards the safety, soundness and stability of the financial system in the country.
It is imperative at this juncture to say that the NDIC has been resolutely committed to its mandate since it commenced operations in the last two decades. The Corporation has also significantly contributed to the various banking reforms that had been witnessed over the years in the Nigerian banking sector. Let me therefore use this opportunity to highlight some of the landmark achievements of the Corporation despite the daunting challenges in the nation’s financial market. It is on record that the NDIC had paid a cumulative sum of N90.13 billion to depositors of 48 deposit money banks (DMBs) in-liquidation as at 31st December, 2012 as against N80.18 billion paid to depositors as at 31st December, 2011, representing an increase of about N10 billion.
Similarly, a total sum of N2.50 billion had been paid to depositors of the 103 closed Microfinance Banks (MFBs) as at 31st December, 2012 as against the sum of N2.25 billion that was paid to the insured depositors of the closed (MFBs) as at the end of December 2011. That was not all. A cumulative liquidation dividend payment to shareholders of Alpha Merchant Bank, Nigeria Merchant Bank and Pan African Bank (in-liquidation) stood at N373.04 million, N620.0 million and N293.0 million respectively during the period. This was in addition to the settlement of all the depositors and creditors of the three banks (In Liquidation).
Special Guest of Honour, distinguished ladies and gentlemen, it is on record that the NDIC has consistently guaranteed prompt payment to all depositors of the 48 banks in-liquidation since 1994 to date. The reimbursement cycle has been progressive from the period covering 90 days of liquidation of failed banks in 1994 when direct payment was made on the premises of the closed banks to 30 days in 2004 when Purchase and Assumption (P&A) resolution was adopted and within 48 hours when the bridge bank approach was adopted. The few instances where delay was experienced were due to court cases instituted by shareholders of the affected banks against the Central Bank of Nigeria (CBN) and NDIC challenging the revocation of their banks’ licences.
In addition, the NDIC has mapped out a number of public awareness initiatives, including publications such as Facts about NDIC, Basic Knowledge in Banking, a book on 20 years of deposit insurance in Nigeria, amongst others. Other public awareness initiatives of the Corporation include the following:
•Periodic press briefings by the Corporation’s MD/CEO;
•Organization of Sensitization Seminar for Judges, relevant Committees of the National Assembly and other stakeholders;
•Partnership with the mass media through the annual Editors Forum and Annual Workshop for Business Editors and Finance Correspondents under the umbrella of the Finance Correspondents Association of Nigeria (FICAN);
•Production of television and radio depositor protection awareness jingles in three major Nigerian Languages, namely Igbo, Hausa and Yoruba and transmitting same on national and local television and radio stations nationwide;
•Production and transmission of a weekly public enlightenment television programmes: “NDIC Calling”
•Participation in Kaduna, Enugu and Lagos International trade fairs;
•Hosting of students of higher institutions on educational visits; and
•The development of a new robust and interactive Website – www.ndic.ng.org.
However, given the NDIC’s concern about the low turnout of depositors despite its nationwide public awareness campaigns during previous pay-out exercises, it launched a novel initiative tagged: The Depositor Tracer in 2011to carry out intensive tracing of depositors who were yet to claim their funds trapped in the closed banks. The pilot scheme of the exercise commenced with depositors of Ivory Merchant Bank in-liquidation which was closed in January 1998. Let me seize this opportunity to appeal to all depositors of banks in liquidation to come forward and claim their deposits if they have not done so. This can be done through the branches of our Agent Banks which are located in every part of the country.
At this juncture, the banking public should be wary of the Unlicensed Fund Managers or Wonder Banks to avoid falling prey to fraudsters. Therefore, it is our candid advise to Nigerians to stop patronising all unlicensed fund managers or wonder banks scattered all over the nation. Rather, they should save their hard earned money in NDIC insured licensed deposit taking financial institutions in the country to benefit from the Deposit Insurance Scheme (DIS). Before I conclude this address, let me acknowledge the fact that the Corporation is not unaware of the perennial problems between customers and banks on various issues such as bank charges, account balances and frauds. While the banks have taken some steps in addressing the problems, the Corporation has also introduced some measures such as the creation of a help desk, which is a dedicated toll-free 24-hour telephone line (080063424357), to enable customers report such cases. In addition, the Corporation established Consumer Protection Units in the Bank Examination Department and Special Insured Institutions Department to cater for the need of customers of deposit money banks and primary mortgage banks/microfinance banks respectively. It is noteworthy that the Corporation has been receiving a lot of commendations from depositors and other stakeholders on those initiatives.
Distinguished ladies and gentlemen, let me seize this opportunity to inform you of the collaborative efforts by the Central Bank of Nigeria (CBN) and the NDIC in sanitizing the microfinance banks (MFBs) and primary mortgage banks (PMBs) through the revision of the microfinance policy framework. Other initiatives recently introduced to promote financial inclusion in Nigeria are the agency banking and mobile banking amongst others. I therefore, wish to enjoin you all to take advantage of the opportunities offered by these initiatives to enhance the economic empowerment of our people most of whom have all the while been excluded from formal banking system.
In conclusion, on behalf of the Board, Management and Staff of the NDIC, I wish to express our profound appreciation to the Edo State Government and organisers of this fair for their support and co-operation. We also wish to extend our sincere gratitude to all our special guests, particularly our royal fathers who found time to be here despite their busy schedules. This address will however be incomplete without expressing our profound appreciation to the press who have continued to be our partners in progress. There is no doubt that without the continued support and cooperation of the press, the Corporation’s public awareness initiatives, including our participation in this trade fair will not be given the desired publicity. On our own part, we shall continue to reciprocate the gesture by continuing to organise capacity building programmes that will strengthen their reporting abilities.
Distinguished ladies and gentlemen, before you leave this event, I wish to invite you to our stand to avail you copies of our publications.
I thank you all for listening.
UMARU IBRAHIM, FCIB, mni