425 institutions liquidated by NDIC in repositing exercise

425 institutions have been liquidated by the Nigeria Deposit Insurance Corporation as at December 2019.

The activities comprised of comprising of 51 Deposit Money Banks, 325 Micro Finance Banks and 51 Primary Mortgage Banks.

Assistant Director, Insurance and Surveillance Department of the NDIC, John Kayode Abiodun made this revelation at the 2020 Finance Correspondents Association of Nigeria Forum in Abuja.

Abiodun said: “Through efficient and diligent liquidation activities, the Corporation has successfully paid in full the deposits of the Customers of 18 DMBs, (Both insured and uninsured) while payment to Depositors of Fortune International Bank, Triumph Bank and Peak Merchant Bank was put on hold as at end of 2019 due to litigation challenging the revocation of their operating license.”

“The effectiveness of the NDIC’s efforts in failure resolution had been impaired by a number of constraints and challenges which included: delays in revocation of the licenses of terminally distressed banks; depositor and creditor apathy and ignorance (delay in filing claims); recovery of debts owed the failed banks,” he lamented.

Listing the challenges that occurred in the process, he said “legal actions of owners of closed banks; protracted litigations; disposal of low-quality physical assets of the closed banks and provision of timely liquidity support, amongst others were the travails the NDIC faced.

Abiodun explained that before the NDIC goes on ventures like these, they give Early Warning Signals.

"Early Warning Signals are divided into Non-Financial Red Flags and Financial Red flags. The non- financial red flags may include the following: aggressive growth and excessive competition for deposits, shareholder’s squabbles, frequent changes in management and ownership, change in major business lines," he said.