Directors, staff of collapsed banks excluded from DIS
… NDIC commences sale of distressed banks’ properties
By Patience Ikpeme
Money deposited by directors and staff of collapsed banks in the same bank will not be covered by Deposit Insurance Scheme (DIS)
Tanko Yahaya, Manager, Communication and Public Unit of the Nigeria Deposit Insurance Corporation (NDIC) made this disclosure during the Financial Literacy Day Programme held by the NDIC in Abuja on Monday.
He explained that the DIS does not extend to insider deposits and other specified categories.
He clarified that the NDIC guarantees the payment of deposits up to the maximum limit set by law in the event of a failed financial institution.
The DIS currently covers all licensed deposit-taking financial institutions in Nigeria, including banks, microfinance banks, primary mortgage banks, payment service banks, and mobile money operators.
Yahaya emphasized that deposits held by insiders, interbank placements (exempted since 2007), and deposits used as collateral for loans are not covered by the NDIC.
He stated that the directors of failed banks should not expect to receive payments from the NDIC, as they are responsible for the bank’s failure.
Yahaya shared further details about the Nigerian banking sector, revealing that as of June 30, 2022, there were 33 Deposit Money Banks, 882 Microfinance Banks, 34 Primary Mortgage Banks, three Payment Service Banks, and 29 Mobile Money Operators.
He also mentioned that the NDIC has overseen the liquidation of 467 banks since 1994, including 49 DMBs, 367 MFBs, and 51 PMBs.
Yahaya highlighted that the coverage limit for DMBs, non-interest banks, PMBs, PSBs, and subscribers of MMOs is N500,000, while the coverage limit for MFBs is N200,000.
Earlier, the Managing Director of the NDIC had disclosed that the process of selling the assets of banks whose licenses were revoked by the Central Bank of Nigeria had begun.
This information was conveyed through a statement signed by Bashir Nuhu, the Director of Communication and Public Affairs at the NDIC.
The NDIC in a statement revealed that it has initiated measures to sell the assets of defunct banks and recover outstanding debts in order to distribute liquidation dividends to depositors whose claims exceed the maximum insured amounts.
For microfinance banks (MFBs), the maximum insured amount is N200,000, while for primary mortgage banks (PMBs), it is N500,000. The NDIC assured customers of these closed banks that they will receive prompt payment of their insured sums.
