BREAKING NEWS, Business
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The Nigeria Deposit Insurance Corporation is now paying uninsured depositors of banks who failed to meet the requirement of the banking sector consolidation nine years ago
| By Anayo Ezugwu | Aug 3, 2015 @ 01:00 GMT |
NINE years after the banking sector consolidation exercise, the Nigeria Deposit Insurance Corporation, NDIC, has stepped up payment to uninsured depositors of closed banks after the mandatory due diligence. The corporation, which disclosed this in its 2014 annual report, said the sum of N94.74 billion was paid as liquidation dividends to 250,592 depositors in 2014 compared to N93.51 billion paid to 250,497 depositors as at December 31, 2013.
The amount included the uninsured portion of private sector depositors of 11 out of the 13 banks closed post-consolidation which was funded by the Central Bank of Nigeria, CBN. According to the breakdown by the NDIC, “The payment of liquidation dividends to shareholders of banks-in liquidation continued in 2014. The sum of N1, 728.4 million was declared as dividends to 1,284 creditors of nine banks.
“Out of that amount, the NDIC had paid the sum of N1, 247.77 million to the 889 creditors who filed their claims as against N1, 191.54 million paid to the 424 creditors as at 31st December, 2013. The cumulative liquidation dividend declared for shareholders of three banks-in Liquidation remained at N2.56 billion in 2014 as in the previous year. The total Liquidation dividends paid to 453 shareholders of Alpha Merchant Bank, Pan African Bank and Nigeria Merchant Bank stood at N2.03 billion as at 31st December, 2014.
“In 2014, the sale of three accounts for the total offered sum of N262.64 million was concluded and the proceeds paid by AMCON. The sum of N163, 859.70 million and N6, 997.42 million were due from the various customers of the 46 DMBs and 187 MFBs in-liquidation, respectively, as at 31st December, 2014. The cumulative recoveries from the debtors of the DMBs and MFBs as at 31st December, 2014, were N26.75 billion and N127.64 million compared to N25.31 billion and N44.98 million, respectively, as at 31st December, 2013,” the report said.
The corporation assured that it will live up to its major mandate of protecting the funds deposited in banks by customers in the event of failure of banks, urging more Nigerians to cultivate the culture of saving money in banks to further boost economy. NDIC added that bank customers’ safety net providers was also necessary and was being protected to engender confidence in the financial system and cushion bad effects of any failure on ordinary Nigerians, as against shareholders, who usually own banks and earn returns on their investment.
Speaking to corps members at the Keffi sensitisation workshop held recently, Kingsley Nwaigwe, deputy director in the research department of the NDIC, declared that it was more reasonable to protect the vulnerable savers than protecting a few. He said, “We are here to inform and educate our enterprising youths on the need to imbibe banking culture, first and foremost. To tell you that even with the stipend your parents give you and what you are getting from your employer now, which is the federal government, you can still make savings.
“The NDIC has a mandate as a deposit insurer and liquidator of failed banks wherein we give between maximum of N500, 000 to each depositor of commercial banks and N200, 000 to each depositor of micro-finance and primary mortgage banks in the event of their banks failure. It is pertinent to say that this coverage limit currently covers over 95 percent of bank depositors in the country.”
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Tags: Alpha Merchant Bank AMCON banking sector CBN Central Bank of Nigeria closed banks consolidation dividends Kingsley Nwaigwe Liquidation NDIC Nigeria Deposit Insurance Corporation Nigeria Merchant Bank Pan African Bank shareholders
