Why Savanah Bank, Fortis, Aso Savings Depositors Are Yet Get Refunds ~NDIC
By Olumidagreaton November 23, 2018
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Nigeria Deposit Insurance Corporation (NDIC), Africa’s largest economy’s deposit insurer has attributed the non-payment of depositors of failed banks to the delay in amending the enabling act establishing the corporation.
Umaru Ibrahim, chief executive of the corporation depositors of one commercial lender, a micro-finance and a mortgage firm are yet to get their deposits refunded due to certain clauses in the Act enabling law of the deposit insurer.
He said depositors of Savanah Bank, Fortis Micro-Finance Bank, and Aso Savings & Union Homes are suffering because they have not been able to recover their monies trapped in the banks since they were liquidated.
He said the suffering of the depositors would continue unless the NDIC enabling Act was speedily amended by the National Assembly.
Citing the defunct Savanah Bank as an example, the MD said the NDIC Act, as presently enacted, inhibits the corporation from reimbursing depositors since their bank licences were yet to be revoked due to protracted litigation.
The NDIC boss on Tuesday, therefore, appealed to the chairman, Senate Committee on Banking, Insurance and Other Financial Institutions, Rafiu Ibrahim, to do all within his capacity to ensure the NDIC Act was speedily amended.
On the recent activities of the corporation, the MD provided updates including NDIC’s revocation of the licences of 153 Micro-Finance Banks (MFBs) and six Primary Mortgage Banks (PMBs) by the Central Bank of Nigeria (CBN).
Members of the Senate committee were informed the corporation had already commenced the payment of depositors of 25 MFBs and the deposits verification of 50 others.
He listed the challenges encountered by MFBs in particular to include non-performing loans, insider credit and abuse, non-compliance with extant regulations on their establishment and the overbearing indulgence in other fringe operations, along with poor earnings.
The NDIC boss also informed members of the committee of the strong resolve and commitment of the corporation to assist in the investigation and prosecution of all those who contributed to the collapse of the defunct Skye Bank.
Chairman of the Senate committee, Mr Ibrahim, said the committee was committed to the accelerated amendment of the NDIC Act, 2006, to eliminate the gaps hindering the full realisation of the public policy objectives of the implementation of the Deposit Insurance System (DIS) in Nigeria.
The chairman made the remark during his visit to the corporation on Tuesday with his team on an oversight assignment.
The committee chairman commended the NDIC for the excellent quality of its reports on the supervision of banks, which have become the benchmark in the industry.
He however expressed concerns over the recent CBN policy, which raised the minimum capital requirements for Microfinance Banks in Nigeria from N20 million to N200 million, and N100 million to NI billion, and N2 billion to N5 billion for unit, state, and national MFBs respectively.
The policy, he said, would be inimical to the objectives of the financial inclusion strategy.
The committee reaffirmed its resolve to work with NDIC to confront emerging issues in the industry, such as block-chain Technology, financial Inclusion, cybercrime, digital banking, consumer protection and provision of credits to micro, small and medium enterprises (MSMEs).