NDIC Managing over 600 Assets of Failed Banks
By Patience Ikpeme
The Nigeria Deposit Insurance Corporation (NDIC) has disclosed that it is currently managing the assets of more than 600 failed banks across the country, as it steps up efforts to recover outstanding loans used to settle depositors.
The Corporation made this known during a sensitisation seminar for Debt Recovery Agents in the Northern zone held in Abuja on Thursday. The seminar brought together agents engaged by the NDIC to help recover loans and advances granted by banks before they collapsed.
Speaking with journalists on the sidelines of the event, the Director of the Assets Management Department, Mrs. Patricia Okosun, said the training was organised to ensure that recovery agents clearly understand their responsibilities, the legal powers available to them and the expectations of the Corporation.
She explained that once a bank fails, all its assets, especially loans given out to customers, are transferred to the NDIC for recovery.
“We want to let them know things that are available, tools that are available in our assets. Now, it’s NDIC assets. So it’s not an asset that everybody may know about,” she said.
According to her, the Corporation is also extending its legal powers to the agents to enable them carry out their assignments effectively.
“We want to let them know these are the powers we have, which, of course, since they are agents, we’re also transferring to them to use to help recover the risk assets that we have firmed up to them. What we do is, when a bank fails, the assets are transferred to us. We seek to recover all the loans – all, every kobo, because the loans actually is what we use to pay depositors after we have paid the insured sum,” Okosun stated.
She disclosed that about 560 of the failed institutions are Microfinance Banks, while 32 are Deposit Money Banks.
“So in total, we have more than 600 failed institutions whose assets we are managing. That is the loans and advances that were given out when the banks were in operation. That’s actually what the debt recovery agents seek to recover. And that’s what we’re trying to sensitize them on,” she said.
The NDIC is responsible for paying insured deposits to customers when banks fail. However, the Corporation relies largely on the recovery of loans and other assets of the failed banks to make additional payments to depositors beyond the insured limit.
Industry observers say the recovery of bad loans has remained one of the biggest challenges in bank liquidation, especially where borrowers are unwilling or unable to repay.
Also speaking at the seminar, the Director of Legal Department, Mr. Kushimo Olafemi, said the event was aimed at putting into action the provisions of the NDIC Act for more effective debt recovery.
He explained that the NDIC Act enacted in 2023 strengthened the Corporation’s powers, particularly in the area of recovering debts owed to failed banks.
“The Act is a foolproof key to ensure that we can ensure speedy recovery of those debts. We know the insured sum of money paid. The only insured sum would be paid from the realized assets of the bank. And it is very important in ensuring public confidence in the financial system. And that is why this Act has been improved and enhanced in the wisdom of the legislature, the executive arm of the government,” Olafemi said.
He told the recovery agents that their work is critical to maintaining trust in the banking system, since depositors depend on timely payments when banks shut down.
“We want to get feedback from you on your challenges in the recovery of the debt. We want your opinion, and how we can better synergize all efforts towards effective debt recovery in depositor payment and deposit guarantee,” he added.
The seminar is part of a broader strategy by the NDIC to improve coordination with external recovery agents and ensure that outstanding loans tied to failed banks are traced and recovered as quickly as possible.
For many depositors, especially small business owners and individuals who saved their life earnings in failed banks, the pace of asset recovery often determines how soon they can receive their full entitlements.
With more than 600 failed institutions under its management, the NDIC faces a huge task. The Corporation said it remains committed to recovering every possible naira owed to the failed banks in order to strengthen depositor protection and maintain stability in Nigeria’s financial system.
