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Nigeria Deposit Insurance Corporation (NDIC) announced it has resolved the private deposits of 11 of the 13 banks which amount to N73.4 billion. This is while owners of the remaining two banks – Fortune International Bank and Triumph Bank are still embroiled in a legal battle with the Corporation in court.
NDIC, which also reaffirmed increase in deposit insurance coverage from N50,000 to N200,000 per depositors of universal banks, said it has adopted the “novel Purchase and Assumption (P&A) mechanism to resolve their failure.”
Ganiyu Ogunleye, managing director of the corporation, while explaining the rationale for adopting the P&A, said it was aimed at ensuring continued access to banking services by customers of the failed banks in the same business premises. Moreover, he added that it would also encourage banking habits and savings mobilisation, both of which are critical for economic development.
Regarding the two other banks still challenging NDIC’s application for winding-up orders in court, Ogunleye regretted that the action would stall the corporation’s move to reimburse their depositors.
Speaking on the fate of the 11 failed banks, he assured that once the private deposits are transferred to an assuming bank under the P&A, they are deemed to have been paid.
According to him, the depositors are at liberty to withdraw their monies or open bank accounts to be operated according to their funding needs.
Ogunleye however reminded that all the assuming banks are aware that no conditionalities should be attached to fund withdrawal by depositors of failed banks.
The implication of this, Ogunleye disclosed is that none of the banks (assuming banks) are to force depositors against their wills to open accounts with them. Adding that, “any depositor that faces such embarrassment should bring such to the attention of the corporation.”
The NDIC boss further explained that upon reimbursement to creditors of failed banks, the banks have been classified into two broad categories – the 36 banks that failed before 2005 bank consolidation programme and the 13 banks that failed post consolidation.
“With regard to 36 banks that failed post consolidation, the litigations over the revocation of the banking licenses of Savanna Bank and Peak Merchant Bank are still pending before courts.
“In respect of the 34 banks in liquidation pre-consolidation, the Corporation has declared 100 percent liquidation dividend (that is full recovery of deposits) in favour of 11 banks while dividend of up to 90 percent have been declared in favour of depositors of the remaining 24 banks,” he said.
According to him, in quantum, the Corporation has paid N3.3 billion (or 63 percent of N5.2 billion insured in 34 banks) and N6.1 billion out of the N12 billion liquidation dividends already declared.
Ogunleye thereafter informed depositors of the defunct Cooperative and Commercial Bank (CCB) that payment of additional dividend of N545 million the NDIC declared already commenced since yesterday.
He thus advised them to visit Afribank, Fidelity Bank, Spring Bank, Diamond Bank, First Bank, Zenith Bank, Bank PHB, United Bank for Africa, and Union Bank for their deposits.