The Nigeria Deposit Insurance Corporation (NDIC) has revealed that a total of N1.759 trillion of depositors funds have been protected by the bridge bank initiative till date in collaboration with the Central Bank of Nigeria (CBN).
It explained that in the discharge of its statutory role, it adopted the Bridge Bank mechanism to resolve the failure of three (3) Deposit Money Banks (DMBs) namely – Afribank, Spring Bank and Bank PHB in 2011. Similarly, in 2018, that mechanism was used to resolve the failure of Skye Bank Plc.
Managing Director and CEO of the NDIC, Alhaji Umaru Ibrahim, made this known on Friday during a press conference to commemorate the 30th anniversary of the Corporation in Abuja.
According to him, “It should interest you to note that the bridge bank initiative safeguarded 12,667 jobs, protected deposit liabilities of over N1.759 trillion which ensured that depositors had uninterrupted access to their funds, and prevented the systemic repercussions of the failure of the bank on the entire financial system.
“The Bridge bank option engendered macro-economic stability, sustained daily operations of the failed banks including meeting maturing obligations and enhanced the confidence of depositors and other stakeholders”.
Represented by the Director of Communication & Public Affairs, Mr. Sunday Oluyemi, he added that: “Since its inception, the Corporation successfully responded to economic realities and yearnings of depositors by periodically increasing the Maximum Deposit Insurance Coverage to enhance the confidence of the public in the Nigerian financial system. On average, this is done every five years in line with Global best practice.
“To date, the NDIC has paid a cumulative sum of over N8.25 billion as insured amount to 442,999 depositors of closed DMBs; paid over N2.97 billion to 83,415 depositors of closed Microfinance Banks (MFBs), and over N70.53 million was paid to 869 depositors of closed Primary Mortgage Banks (PMBs)”.
In pursuit of its mandate to ensure that depositors of liquidated banks do not suffer loss or pain, the NDIC boss explained that between 1994 to date, 53 DMBs, 325 MFBs and 51 PMBs were put under liquidation without disruption to the nation’s payment system.
According to him, “NDIC’s liquidation activities involved recovery of debts and realization of assets of closed banks.
To date, a cumulative amount of over N29.112 billion was recovered from debtors of DMBs in liquidation. N129.10 million was realized from debtors of failed MFBs, while that of PMBs stood at N300 million.
“On realisation of assets, currently N21.502 billion was collected from the disposal of physical assets of closed DMBs, while N404.74 million and N78.17 million were realised in respect of MFBs and PMBs, respectively.
“Debt collection and assets sales culminated in the payments of over N116.258 billion as Liquidation Dividends to depositors, creditors and shareholders of closed DMBs, MFBs and PMBs as at today.
“It is important to stress that through sustained and diligent liquidation activities, NDIC has realised assets to pay in full, deposits of the customers of 17 of the DMBs (In-liquidation).
In effect, all the depositors of the 17 defunct banks who came forward to file their claims have been paid all their monies (both insured and uninsured) erstwhile trapped in those banks”.
