WorldStage Newsonline– The Nigeria Deposit Insurance Corporation (NDIC) a deposit insurer that is charge with the responsibility of supervising banks, guarantee deposit in terms of failure , resolution and liquidation has lamented that one of the challenges it is facing is debt recovery, as customers of banks that borrowed are not willing to pay their debt
However, the agency whose primary roles include to ensure that failing and failed institutions are resolved in a timely and efficient manner has announced plans to recover beyond N400 billion from debtors of liquidated banks in the country, in other to pay the depositors of the liquidated banks.
Speaking at the 2023 NDIC Finance Correspondent of Nigeria (FICAN) workshop in Owerri, Managing Director and Chief Executive Officer, NDIC, Mr Hassan Bello said the corporation had paid N1.6 billion to more than 40,000 depositors of failed banks.
He said, “The value of debt we are about to recover if you take into account, all the banks in liquidation, all the Deposit Money Banks, Micro finance banks the primary mortgage institutions, this debt is beyond N400 billion that is what we are expecting to recover so that we can pay those depositors of those banks liquidation.
“Already we have paid substantial amount and that is why we have put up advert so that depositors of those failed banks can come forward, so that we can verify them in other to pay what we call liquidation dividend, this is what we pay over and above the insured amount. ”
On the challenges of debt recovery, he said, “those loans that were granted with the deposit of people that were collected by the banks and it is only when those debt are paid back then the NDIC will now pay the depositors of those failed banks, and that is one of the challenges NDIC are facing.”
On the latest plans of recapitalization of banks by the Central Bank of Nigeria (CBN), Mr Hassan, said it is important to wait and see the clear direction, what the requirement is going to be, and how much level of capitalisation will be required.
“But I know as we speak, if you look at the performance of the industry, is very sound looking at the key financial soundness indicators of capital adequacy, liquidity, earnings and quality of asset.
“But certainly, and the government is trying to grow our GDP to $1 trillion. We also need bigger banks to be able to play within that space, and I believe it is within that context that the CBN is looking to recapitalize those banks, asking the banks to recapitalize to enhance their capital.
“We await the CBN for further details on this recapitalisation process.”
He however, plead for support from the government to assist the corporation, in making sure that if there is a way to bring-in all the stakeholders – the legislature, the judiciary – “to make sure that any time we take our cases before the court, those cases are given expedited hearing so that justice can be dispensed.
“In all the cases that we have taken before the court, what we are trying to prove is that Mr X has borrowed from the bank and let the court decide that this person is owing that let him pay.
“like I said at the beginning, the loans that where granted by those banks in liquidation where out of depositors money, not their capital. So, it is only when they pay that we’ll be able to pay those depositors. It is only when debtors repay back that we’ll be able to pay the depositors. This is one of our greatest challenge.”
