By Musa Ibrahim
The Nigeria Deposit Insurance Corporation (NDIC) has launched an intensified campaign to recover an estimated N1.5 trillion owed by debtors of over 50 liquidated deposit money banks (DMBs), alongside 100 primary mortgage banks (PMBs) and microfinance institutions.
The corporation emphasized that timely recovery is essential to reimbursing depositors whose funds remain trapped in failed institutions.
The disclosure came during a sensitization seminar for debt recovery agents in Lagos. NDIC officials highlighted that the new NDIC Act 2023 equips them with expanded tools to pursue debtors and hold parties responsible for bank failures accountable. Olufemi Kushimo, Director of the Legal Department, described the legislation as “a full bouquet of tools” that not only supports debt recovery but also acts as a deterrent to ensure the banking sector remains disciplined.
Kushimo stressed that many of the affected depositors are small business owners, market traders, and POS operators whose trapped funds are critical to daily operations. He stated that recovering uninsured deposits, amounts exceeding the insured limit, largely depends on the success of asset recovery efforts. “To encourage people to keep money in the bank, the earlier we pay, the better. Reputation is very important,” he said.
Patricia Okosun, NDIC’s Director of Asset Management, explained that the seminar was designed to familiarize debt recovery agents with the enhanced provisions of the NDIC Act 2023. The Act strengthens the corporation’s ability to pursue recalcitrant debtors and recover outstanding loans. She expressed optimism about the recovery process despite the scale of the debt portfolio but cautioned that litigation could affect timelines. “Nobody can say because of litigation that you are going to do it in one month or two months. But the earlier we recover, the better, so we can pay our depositors,” Okosun said.
In addition to recovery efforts, NDIC has reaffirmed its commitment to safeguarding depositors and building public confidence in the financial system. At a stakeholders’ town hall meeting in Lagos recently, the Managing Director of NDIC, Mr. Thompson Sunday, represented by the Director of Bank Examination, Adedayo Olukoya, highlighted the importance of public awareness on deposit protection. The engagement, themed ‘Strengthening Depositor Confidence: NDIC’s Role in Financial System Stability and Consumer Protection,’ aimed to educate depositors on how the corporation protects their funds when financial institutions fail.
Director of Claims Resolution, Olawale Sule, detailed NDIC’s four core mandates: deposit guarantee, banking supervision, failure resolution, and bank liquidation. Under current regulations, depositors in deposit money banks, non-interest banks, and mobile money operators are insured up to N5 million per customer, while customers of microfinance and primary mortgage institutions are covered up to N2 million. NDIC prioritizes depositors in the payment hierarchy and leverages the bank verification number (BVN) system to trace alternate accounts and expedite reimbursements immediately following closures.
Beyond deposit payouts, NDIC works closely with the Central Bank of Nigeria to monitor the financial health of institutions through routine supervision. Officials emphasized that these measures are part of a broader strategy to restore trust, maintain stability, and encourage continued participation in the banking system.
The renewed focus on debt recovery and depositor protection underscores NDIC’s commitment to ensuring that bank failures do not undermine confidence in Nigeria’s financial system.
