NDIC Has Less Than N2tr To Pay Failed Bank Depositors

The Nigeria Deposit Insurance Corporation (NDIC) has cried out
that it has less than N2 trillion to meet depositors’ demands in
the event of a banking system collapse.

Mr. Bello Hassan, the new Managing Director of the NDIC, made
this known in Abuja on Thursday when he was inaugurated as Managing
Director of the NDIC.

Hassan appealed that there was need “to build up depositors
insurance fund because that’s what we use in making pay out in the
event of any liquidation”.

The less than N2 trillion, he said, is inadequate to pay
depositors of failed banks in the future, stressing that “there is
the need for us to quickly fast track the build-up of the
Depositors Insurance Fund (DIF) in the event of any eventuality we
shall have sufficient fund to be able to pay depositors without
recourse to the treasury”.

If the less than N2 trillion Depositors Insurance Fund is
boosted, Hassan said the NDIC will also be able to “offer
assistance to insured deposit taking institutions in a timely
manner in order to promote stability and confidence within the
banking system”.

The new NDIC boss lamented that “there has been slow growth in
the Deposit Insurance Fund. However, if the Act is reviewed we will
find a way to ensure that we can actually fast track the build up
of this Deposit Insurance Fund.

This, he said, has become necessary “when you look back to the
global crisis of 2007, 2008 when the CBN had to bail out a number
of banks, about N620 billion was injected by the CBN to liquidate
those institutions and those liabilities that are being carried by
AMCON are due for settlement”.

Hassan warned that the financial system “cannot afford to have
similar situation, should we experience another crisis there is
need for us to see how we can quickly fast track the growth of this
Deposit Insurance Fund so as to ensure that in the event of any
crisis we should be able to pay depositors as at when due without
recourse to CBN or we go to the treasury to bail us out”.

He said he will work with relevant stakeholders to address
challenges confronting the NDIC going forward.

The Nigeria Deposit Insurance Corporation (NDIC) has cried out
that it has less than N2 trillion to meet depositors’ demands in
the event of a banking system collapse.

Mr. Bello Hassan, the new Managing Director of the NDIC, made
this known in Abuja on Thursday when he was inaugurated as Managing
Director of the NDIC.

Hassan appealed that there was need “to build up depositors
insurance fund because that’s what we use in making pay out in the
event of any liquidation”.

The less than N2 trillion, he said, is inadequate to pay
depositors of failed banks in the future, stressing that “there is
the need for us to quickly fast track the build-up of the
Depositors Insurance Fund (DIF) in the event of any eventuality we
shall have sufficient fund to be able to pay depositors without
recourse to the treasury”.

If the less than N2 trillion Depositors Insurance Fund is
boosted, Hassan said the NDIC will also be able to “offer
assistance to insured deposit taking institutions in a timely
manner in order to promote stability and confidence within the
banking system”.

The new NDIC boss lamented that “there has been slow growth in
the Deposit Insurance Fund. However, if the Act is reviewed we will
find a way to ensure that we can actually fast track the build up
of this Deposit Insurance Fund.

This, he said, has become necessary “when you look back to the
global crisis of 2007, 2008 when the CBN had to bail out a number
of banks, about N620 billion was injected by the CBN to liquidate
those institutions and those liabilities that are being carried by
AMCON are due for settlement”.

Hassan warned that the financial system “cannot afford to have
similar situation, should we experience another crisis there is
need for us to see how we can quickly fast track the growth of this
Deposit Insurance Fund so as to ensure that in the event of any
crisis we should be able to pay depositors as at when due without
recourse to CBN or we go to the treasury to bail us out”.

He said he will work with relevant stakeholders to address
challenges confronting the NDIC going forward.