The Nigeria Deposit Insurance Corporation (NDIC) has urged the Economic and Financial Crimes Commission (EFCC) to expedite the return of assets recovered on NDIC’s behalf. Doing this will facilitate the prompt reimbursement of depositors affected by bank failures.
This appeal was outlined in a press release by Bashir A. Nuhu, the NDIC’s Director of Communication & Public Affairs, highlighting the essential collaboration between NDIC and EFCC in safeguarding the financial system’s integrity.
During a recent courtesy visit to the EFCC’s headquarters in Abuja, NDIC’s Managing Director and Chief Executive, Mr. Bello Hassan, praised the commission for its steadfast commitment to fighting corruption and financial crimes.
He underscored the crucial role EFCC plays as a key member of the Taskforce on Implementation of the Failed Banks Act, which the NDIC chairs. This cooperation is vital for scrutinizing and prosecuting individuals responsible for bank failures, ultimately protecting depositors’ funds and ensuring the stability of the financial system.
NDIC and EFCC collaborate on 10 high-profile cases
Mr. Hassan also spoke about the strengthened partnership between NDIC and EFCC, notably through the establishment of the NDIC Help Desk within the EFCC in August 2022. This initiative has led to the investigation of 10 high-profile cases.
Stressing the importance of recouping depositor funds, Mr. Hassan requested the return of assets recovered by the EFCC to NDIC. This action would allow for the speedy distribution of liquidation dividends to depositors who have suffered from banking sector collapses.
The statement read:
- “Mr. Hassan elaborated on the existing partnership between the two organisations which led to the establishment of the NDIC Help Desk in the EFCC in August 2022. As a result, he added, a total number of 10 high profile cases referred to the Commission are currently under investigation.
- “The NDIC Boss called for enhanced collaboration in the recovery of Depositors’ funds to ensure that liquidation dividends are paid to depositors whose monies were lost as a result of bank failures. He, therefore, solicited for the return of recoveries made by the EFCC on behalf of the NDIC to the Corporation’s coffers in order to facilitate the timely reimbursement of Depositors.”
Link between criminal activities and bank failures
EFCC Chairman Mr. Ola Olukoyede, acknowledging the link between criminal activities and bank failures, called for increased oversight by NDIC and the Central Bank of Nigeria (CBN) to prevent potential bank failures.
He noted the EFCC is committed to deepening its collaboration and synchronize efforts more closely with NDIC, with the goal of protecting the integrity of Nigeria’s banking sector. This joint endeavor marks a crucial step towards reducing the risks associated with bank failures and enhancing the resilience of the financial system.
The statement added:
- “The EFCC Chairman Mr. Ola Olukoyede emphasised the interconnection between criminal activities and bank failures, urging NDIC and the Central Bank of Nigeria (CBN) to intensify oversight to prevent the risk of bank failure. He pledged the EFCC’s commitment to deepening collaboration and synergising efforts in combating financial crimes, thereby safeguarding the integrity of Nigeria’s banking sector.”
More Insights
- In the event of the failure of a financial institution and the revocation of its licence by the CBN, the NDIC will reimburse eligible depositors up to the maximum insured amount of N500,000 in Deposit Money Banks (DMBs) and Primary Mortgage Banks (PMBs) and N200,000 in Microfinance Banks (MfBs).
- The Corporation sells the assets of failed banks and collects debts owing to them so that depositors whose claims are greater than the maximum insured sums of N200,000 for MFBs and N500,000 for PMBs can receive liquidation dividends on a pro-rata basis.
- The liquidation dividend is the amount paid to depositors by the NDIC after a bank is liquidated if the depositor’s amount exceeds the insured amounts. Payments to creditors and shareholders are made from the proceeds after all depositors have been repaid from the assets of closed financial institutions.
- Nairametrics earlier reported that the depositors, creditors, and shareholders of 20 liquidated banks are expected to get about N61.63 billion as paid liquidation dividends.
- The NDIC also plans to increase the maximum deposit insurance coverage to account for the effects of recent economic changes.
