1. It gives me immense pleasure to welcome all of you to the ancient city of Yola as we commence the 16th edition of our highly impactful workshop for Business Editors and Finance Correspondents in Nigeria. As you are all aware, the annual workshop was consciously conceived by the Corporation to keep our distinguished friends in the media up to date with its activities to allow for a balanced and informed commentary on the implementation of the Deposit Insurance System (DIS) in Nigeria. The workshops were also designed to build up the capacity of media practitioners on topical issues in the financial services industry in general.
2. As worthy ambassadors of the Fourth Estate of the realm, I want to assure you all that the NDIC values your critical role in the socio-economic development of the nation. Indeed, the support of the media has been instrumental to the successful implementation of the DIS by the Corporation since its inception thirty years ago. It is in recognition of the crucial and strategic role the media has to play in the actualization of our own objectives that the NDIC has remained faithful in its support for the annual FICAN Conference along with the Editors Forum.
3. Some among you who attended the press conference organized in Abuja to herald the commencement of activities to commemorate our 30th Anniversary in October would recall that this year marks a significant milestone in the life of the Corporation. The year 2019 not only marks the 30th anniversary of the Corporation, it also provided an opportunity for a careful review of our operations with a discerning eye on what the future portends in our commitment to the realization of the public policy objectives of the DIS in Nigeria.
4. The NDIC commenced operations in March 1989 following the promulgation of Decree No. 22 of 1988 (now repealed and replaced with NDIC Act No 16 of 2006) with the four broad mandates of Deposit Guarantee, Bank Supervision, Distress Resolution and Liquidation while also operating as a Risk Minimiser. Its primary public policy objectives were to contribute to financial system stability by making incidences of bank runs less likely, while also protecting depositors by providing an orderly means of resolution and compensation in the event of bank failures.
5. In the first decade of its existence, the primary focus of the NDIC was the management of cases of distress in the banking system. When it commenced operations in 1989, a number of banks were already in varying degrees of insolvency. The Corporation rose to the occasion in its adoption of multiple distress resolution options in line with its mandate and functions to deal with the situation at the time. These included the provision of some assistance in the form of direct loans, acceptance of accommodation bills; changes in the management of the affected banks, assisted mergers with other viable institutions, imposition of holding actions, and; in some instances, the outright take-over of the management and control of the banks involved.
6. Other failure resolution options adopted during that era included bank liquidation. The Corporation’s first experience in bank liquidation occurred barely four years after its establishment on the 21st January 1994 when the Central Bank of Nigeria (CBN) revoked the licences of two (2) merchant banks and the Corporation was appointed the provisional liquidator. Between 1994 and 1999, the licences of 31 banks were similarly revoked and subsequently liquidated by the NDIC through the same provision. Instructively, almost all the banks closed during that era were resolved through depositors’ reimbursement (Direct Pay-out) mechanism. The Corporation also efficiently managed the operations of the Failed Banks Tribunals established by the Federal Government in 1994 to handle established cases of malfeasance arising from the liquidation of the closed banks.
7. The second decade of the Corporation’s evolution as a public institution was defined by its reaction to the regulatory challenges posed by the Bank Consolidation exercise embarked upon by the CBN, and the global financial crisis. These developments prompted the Corporation to embark on a number of projects to strengthen its capacity for effective service delivery.
8. The Corporation responded efficiently to the post consolidation crisis experienced in the banking sector by adopting the Purchase and Assumption (P & A) resolution option to resolve the problems of 13 banks closed in 2006 for their failure to meet the new consolidation/recapitalization of N25 billion financial threshold introduced by the CBN. In addition to the Purchase & Assumption option, over years, the Corporation has been very creative in the design and implementation of various safety-net mechanisms in response to evolving crisis in the nation’s banking, payment and financial systems.
9. We also embarked on other significant reforms in the period including development of Enterprise Risk Management, implementation of Differential Premium Assessment System (DPAS), Capacity Building in Risk-Based Supervision (RBS), deployment of a Performance Management System, enhanced Deb Recovery System and Increased Pay-out to both insured and un-insured depositors.
10. Within the same period, the Corporation also extended DIS coverage to Micro Finance Banks (MFBs) and Primary Mortgage Banks (PMBs). In a swift response to public yearnings, and to bolster public confidence in the financial system; in 2010, the maximum Deposit Insurance coverage was increased from N200,000 and N100,000 to N500,000 and N200,000 for deposit money banks (DMBs) and Microfinance Banks (MFBs)/Primary Mortgage Banks (PMBs), respectively. The coverage level for the PMBs was later reviewed upward to N500, 000. Other significant accomplishments include the following:
• Provision of the deposit insurance coverage to subscribers of Mobile Money Operators (MMOs) to the maximum limit of ₦500,000.00 through the Pass-Through Deposit Insurance Framework. As it stands, the number of licensed MMOs by the CBN is twenty three (23), with eight (8) being “Bank-Led’’ and the remaining fifteen (15) “Non-Bank Led”. As at 30th June, 2019, the number of subscribers to MMOs stood at 9,249,265.
• As at 30th June, 2019, the Corporation received a total number of 35 petitions/complaints from Banks customers on various issues such as ATM frauds, unauthorized funds transfers, cheque related issues and much more. Investigations and mediation were carried out where necessary and customers were appropriately reprieved.
• In August 2019, the Corporation signed a Memorandum of Understanding (MOU) on experience sharing and capacity building with the Korean Deposit Insurance Corporation (KDIC) and the Taiwan Central Deposit Insurance Corporation to further deepen the implementation of the DIS in Nigeria. The MOU also aims to enhance our capacity to understand and supervise the FINTECH and the Digital currencies phenomenon. FINTECH and Digital currencies are not only witnessing rapid deployment globally but also locally in Nigeria.
• Following the issuance of the Framework for the Licensing and Regulation of Payment Service banks (PSBs) by the Central Bank of Nigeria (CBN) which stipulated the extension of Deposit Insurance Coverage to the depositors, the Corporation will protect the depositors of PSBs and guarantee to pay them N500,000.00 as insured sum in the event of their closure.
11. The NDIC is a founding member of the International Association of Deposit Insurers (IADI), established in 2002. The NDIC is a member of the IADI Executive Council (EXCO) and also the Chairperson of the IADI-Africa Regional Committee (ARC). As an undisputed leader in Deposit Insurance on the African continent, the Corporation regularly assists other DIS jurisdictions in Africa on capacity building. As a testimony to our commitment to excellence, the NDIC was recognized by IADI as the Best Deposit Insurance Organization of the year, under Category 2: Core Principles and International Participation in 2014.
12. To assist in the promotion of the financial inclusion initiative of the CBN, the NDIC introduced the Framework for a Pass-through Deposit Insurance scheme to enhance confidence, safety and stability of the mobile payment system. The deposit insurance scheme caters for the interest of the users of Mobile Money platforms as it guarantees payment to the subscribers of the funds domiciled in Mobile Money Operators Trust Pool accounts in insured institutions in Nigeria. The other milestones recorded by the NDIC in the area of financial inclusion has been the promotion of other types of banking sub-sectors such as non-interest banks and strengthening of the Microfinance policy in order to build more inclusive banking system where every Nigerian would have equal access to economic opportunities.
13. In view of the importance attached to staff training and development and in order to build a highly skilled human resource base to drive the actualization of the Corporation’s mandate, the NDIC Academy was established and commissioned in June 2013. Part of the reasons for the establishment of the Academy was to save cost of organizing in-house and implant courses for staff, which hitherto were organized in hotels and conference centres.
14. True to its Vision of becoming one of the best Deposit Insurers in the world by 2020, the NDIC Academy, was recently accredited as a training hub for the financial services industry by the Council of the Chartered Institute of Bankers of Nigeria (CIBN) after a rigorous accreditation process. By that certification, the Academy is poised to fulfil the goal of serving as a ‘’Centre of Excellence’’ on DISs for sister agencies in Africa.
15. In 2018, the Corporation recorded giant strides in its efforts to continuously improve on service and process delivery to its stakeholders. The Corporation received International Standard Organization (ISO) certifications in three (3) areas, namely Information Security, Business Continuity and Information Technology Management from the British Standards Institute (BSI). The Corporation is the first government agency in Nigeria to be certified on all the three (3) Standards at the same time. Also, the NDIC in 2017 was awarded the best performing Ministerial SERVICOM Unit (MSU) in the country, following an assessment of its public service delivery by SERVICOM Office in the Presidency.
16. Obviously, while the Corporation has achieved some measures of success in discharging its mandate, there were also challenges it experienced along the way. Some of the solutions are contained in our proposed amendment to the NDIC Act, 2006. They include the lack of enforcement powers; protracted litigation initiated by owners of closed banks; recovery of debts owed failed banks, amongst others.
17. Obviously, while there is still much work to be done in our aspiration to become one of the best Deposit Insurers in the world, but, considering how far we have come since 1989, we can say that the progress we have recorded so far has been gratifying and worthy of celebrating. With the articulation and adoption of appropriate policies and strategies, the Board, Management and Staff are committed to the objectives of the Corporation and are fully resolved to ensure that the NDIC effectively fulfils its statutory mandate.
18. Distinguished gentlemen of the Press, let me at his point re-state that the media was crucial to our success story in the past 30 years. It is also undeniable that the Annual NDIC FICAN Workshops have emerged as a veritable platform, not only for capacity building, but also for the fostering of the much needed understanding and collaboration between us. It is to this end that we will not rest on our oars towards sustaining the relevance of the workshop through the choice of robust and informed topics and highly qualified resource persons. After all, the entire banking landscape has remarkably changed since the time the Corporation was established.
19. It was in recognition of what the future is likely to portend for the banking industry that for this year’s workshop theme “Nigeria Banking System Stability – Tackling Emerging Issues” was hinged. With the recourse to technology and Fintechs, the entire dynamics of banking has been altered to such an extent that it poses serious challenges for both operators and regulators.
20. I therefore urge you to seize the opportunity provided by this medium to gain the right insight into the contemporary issues in the financial services industry. This will not only help you achieve informed reporting, it will also go a long way in disseminating the appropriate knowledge and information on financial services for the benefit of the Nigerian people.
21. Once again, I warmly welcome you and wish you fruitful deliberations.
Thank you for your attention and I wish you successful deliberations.