Claims Settlement involves the settlement of claims filed by depositors and other creditors of closed banks. It also includes the payment of liquidation dividends to uninsured depositors and creditors of closed banks.
Since inception, the payout option had been applied to 35 out of 49 failed banks. The option involves the winding-up of a failed bank and payment of the insured deposits up to the insurable limit to its depositors.
Depositors with uninsured funds and other general creditors of the failed bank do not receive either immediate or full reimbursement, instead they are issued Liquidator’s Certificates. The certificate entitles its holder to a portion of the dividend declared by the Liquidator from the failed bank’s assets.
Other claimants of the failed bank such as other creditors and even shareholders receive their portion of the dividend declared by the Liquidator from the failed bank’s assets after all depositors had been fully paid.
Given that all the failed banks’ licenses had been revoked before the new NDIC 2006 Act, the deposit insurance coverage level applicable to the insured depositors was ₦50,000.00 per depositor per failed bank. The applicable coverage limit had since 2006 been increased to ₦200,000.00 per depositor per insured failed institution for the universal banks while it became ₦100,000.00 per depositor per insured primary mortgage institution (PMI) or microfinance bank (MFB) in order to ensure the adequacy of the coverage levels. In that respect, as at December 31,2010, the Corporation had paid a total of ₦7.597 billion insured deposits to insured depositors of the bank-in-liquidation.