From Uche Usim, Abuja
Mr Bello Hassan, the Managing Director and Chief Executive Officer of the Nigerian Deposit Insurance Company (NDIC) could best be described as an innovation enthusiast and boardroom maestro. He is driving an aggressive corporate upgrade of an institution saddled with the responsibility of being a risk minimiser and protector depositors’ funds.
He clocked a year on the saddle in 2022 but not without some achievements.
Aside being involved in on-site/off-site supervisions of banks and other financial institutions as well as financial stability matters, Hassan championed the recertification of NDIC’s certification by the British Standard Institute on 3 ISO standards to sustain the legacy he inherited.
Hassan saw the ranking of NDIC as 1st out of 301 Ministries, Departments and Agencies (MDAs) of government by the Independent Corrupt Practices Commission’s (ICPC) 2021 Ethics and Compliance Scorecard.
In this interview held on the sidelines of the recent NDIC-sponsored journalists conference in Port Harcourt, he once again advises the public to be wary of unregistered, uninsured and unregulated deposit-taking financial institutions masquerading as officially-approved Deposit Money Banks (DMBs).
He said the one quickest ways of losing investments was to patronise such illegal outfits, stressing that many who fell for their phantom mega rewards had their fingers burnt.
He also speaks on NDIC and the journey ahead.
Boosting depositors’ confidence
At this conference, we are looking at how to boost depositors’ confidence. You know banking is all about confidence, so there is a need to carry the message to depositors so that in the event any licensed deposit-taking institution is unable to meet its obligations, the Corporation is ready to step in and pay up to the maximum insurance. So, that will go a long way in cushioning the losses. So, we recognize the media as one of our critical stakeholders. That is why on an annual basis, we invite them here to the workshop so that we can pass our message and some topical issues that’s happening within the financial system.
As we deepen financial inclusion, we have advised depositors to deal only with licensed financial institutions as listed on both CBN and NDIC websites. They should shun those unlicensed establishments offering mouth-watering offers but that is only to deceive the unsuspecting public. If you invest in such places, you will burn your fingers because they’re not insured with us. You can lose your money at any time.
If you go to the website of either the CBN or the NDIC, you will see the list of all licensed deposit institutions and that is why any institution that is soliciting for deposit, cross-check from the websites of CBN and NDIC.
If they’re listed there, it means they’re regulated and insured and you can’t lose your money.
In terms of the unlicensed operators, that is the illegal operators, we hand them over to the law enforcement agencies so that they can investigate and prosecute them where necessary . Like I mentioned in my opening remarks, NDIC has paid humanity more than N101 billion to both insured and uninsured deposits and depositors of banks that are in liquidation which I’ve already given the statistics of those numbers.
And you know, we are liquidators. At the point of closure, the agency will move in and pay the insured amount then thereafter they will take over the assets and realize it and when the assets are realized, we would now pay depositors what they call liquidation dividend that is over and above what has been insured. That is why the number is over hundred billion and we are continuing this activity to make recoveries from the loans that were granted by the banks in liquidation before liquidation, so that we can pay the dividend. My appeal is for those who borrowed loans to repay because the money is also for depositors. If you want to determine whether the banking system is strong, safe and sound, there are basic indicators that you use to judge; like capital adequacy, liquidity, quality etc. So, looking at those indicators, one can say that the Nigeria banking system is safe and sound despite the challenges that we have passed or are passing through like the COVID-19 pandemic.
Stakeholder engagement
The Corporation will always work harmoniously with all stakeholders, towards enhancing the effective discharge of our mandate. The vision and policy direction of the Corporation under my humble stewardship includes our determination to scale up the deposit insurance framework; the provision of timely support to insured institutions as and when required; to ensure faster and orderly resolutions of liquidated insured institutions; and to continue to assist the CBN in promoting the stability of the banking system. Over the time, we have embarked on a series of strategic initiatives to achieve our desired vision.
Faster and orderly resolution of liquidated banks
In the area of scaling-up the deposit insurance framework and ensuring faster and orderly resolutions of liquidated insured institutions, in May 2022, with the active participation of the relevant stakeholders, we had developed and deployed the Single Customer View (SCV) platform for the Microfinance and Primary Mortgage Banks in order to strengthen our processes and procedure for data collection. The platform would not only ensure availability of quality, timely and complete data to the NDIC, but would eliminate delays often experienced in reimbursing depositors following revocation of institutions’ licenses by the CBN.
The final phase of the implementation of the SCV for Deposit Money Banks (DMBs) will be achieved through the incorporation of the SCV template as part of the on-going Integrated Regulatory Solution (IRS) jointly being developed with the CBN.
Consumer Protection
In the area of consumer protection, the Corporation has strengthened its complaints resolution platforms, which include the toll-free Help Desk, social media handles and Complaints Desks in the Bank Examination,
Special Insured Institutions and Claims Resolutions Departments, as well as our Zonal Offices, to receive and process complaints from depositors.
Deposit guarantee
As at June 30, 2022, the NDIC provided deposit insurance coverage to a total of 981 insured financial institutions. The breakdown includes: 33 DMBs made up of 24 Commercial Banks,
Six Merchant Banks and Three Non-Interest Banks (NIBs) plus two Non-Interest Windows; 882 Microfinance Banks (MFBs); 34 Primary Mortgage Banks (PMBs); three Payment Service Banks (PSBs) and 29 Mobile Money Operators.
Bank liquidation
The NDIC bank liquidation mandate entails reimbursement of insured and uninsured depositors, creditors, and shareholders of banks in-liquidation. The liquidation activities, as at June 30, 2022, covered a total of 467 insured financial institutions in-liquidation, comprising 49 DMBs, 367 MFBs, and 51 PMBs.
As at June 2022, the NDIC had cumulatively paid ₦11.83 billion to over 443,949 insured depositors and over ₦101.37 billion to uninsured depositors of all categories of banks in-liquidation.
It is most profound for me to say that, out of the 49 DMBs in-liquidation, the Corporation in September, 2022 declared 100 per cent liquidation dividend in 20 of those institutions, meaning that the Corporation has realized enough funds from their assets to fully pay all depositors of the listed banks.
NDIC Act
The Nigeria Deposit Insurance Corporation (NDIC) Act 2006 Amendment Bill currently before the National Assembly will help strengthen the capacity of the Corporation to contribute more effectively and efficiently to the stability of the financial system.
It is due for amendment in view of the tremendous economic and technological changes that had taken place in the financial landscape since the enactment of the NDIC Act in 1988 and the last repeal and re-enactment in 2006.
The repeal and re-enactment of the NDIC Act of 2006 is not only timely but necessary if the Deposit Insurance System in Nigeria is to be placed at par with those of other jurisdictions in compliance with best practices. We commend the Chairman of the Senate committee on Banking, Insurance and Other Financial Institutions, Sen. Uba Sani for taking time to study the legal framework for Deposit Insurance in Nigeria, identified the gaps in the framework and decided on the need for the repeal and re-enactment of the extant legislation. We also appreciate the leadership of the Senate and the entire senators for working tirelessly to bring the Bill to the legislative stage of public hearing.