The Nigeria Deposit Insurance Corporation (NDIC) has said that it has created a special desk at the Economic and Financial Crimes Commission (EFCC) to ensure that those responsible for bank failures are thoroughly investigated and prosecuted.
The Managing Director/Chief Executive Officer of the NDIC, Mr Bello Hassan, said this on Wednesday during the 2023 NDIC workshop for business editors and members of the Finance Correspondents Association of Nigeria (FICAN) in Owerri.
The special desk at the EFCC, according to Hassan, would make it easier for the two organisations to work together and coordinate, with the end goal of improving the exchange of data, knowledge, and resources. Such collaboration is essential for thoroughly investigating bank collapse situations and ensuring that the responsible individuals are brought to justice.
He also said that the organization is working with the judiciary to ensure faster and more informed judgements on cases around failed banks.
Hassan said:
- “We have also enhanced collaboration with the bar and the bench, leading to speedy dispensation of justice and more informed judgements on failed banks cases; we have equally put in place policy and framework on Alternative Dispute Resolution for out-of-court settlement, which has enabled us to resolve some hitherto protracted failed bank litigations; we have reviewed the Framework for Differential Premium Assessment System (DPAS) to make it more risk-sensitive and account for significant developments that have taken place in the Nigerian banking system since its adoption in 2008;
- “We have established a special desk at the Economic and Financial Crimes Commission (EFCC), which is energized investigation and prosecution of parties responsible for the failure of banks.”
He also noted that NDIC implemented the Single Customer View (SCV) framework to expedite the disbursement of insured funds to depositors of closed banks.
This initiative has accelerated the process of identifying, validating, and compensating eligible depositors, guaranteeing prompt access to their insured funds following a bank closure.
Hassan also highlighted the organization’s efforts to enhance its systems, processes, and procedures to promote transparency and accountability in its operations.
NDIC plans insurance coverage increase
The NDIC also said it has reached an advanced stage in its plan to review the maximum deposit insurance coverage.
The review is necessary to reflect the impact of recent macroeconomic development.
Hassan noted that the new coverage level, which he did not disclose, will go a long way in reinforcing depositors’ confidence in the NDIC’s deposit guarantee scheme if approved.
As a deposit insurer, the NDIC currently guarantees payment of deposits up to the maximum insured sum of N500,000 to a depositor in Depot Money Banks (DMBs) and Primary Mortgage Banks (PMBs) and N200,000 to a depositor in Microfinance Banks (MFBs) in the event of the failure of a participating financial institution.
He said:
- “The corporation has also reached an advanced stage in the review of the maximum deposit insurance coverage, to account for the impact of macroeconomic developments, since its last review.
- We believe that the new coverage level once approved will go a long way in reinforcing depositors’ confidence in the NDIC’s deposit guarantee scheme.”
He further called for collaboration with all relevant stakeholders in the Nigerian financial system to strengthen banks through prudential thresholds and other regulatory instruments.
