*Insists no cover for virtual currency subscribers
James Emejo in Abuja
The Nigeria Deposit Insurance Corporation (NDIC) has insisted that the defunct Savannah Bank remains a bank with operational licence even though it is currently not in operation.
The corporation further clarified that the bank is not presently under its purview as it has not yet been declared as a liquidated financial entity.
Managing Director/Chief Executive, NDIC, Alhaji Umaru Ibrahim, gave the clarification, against the backdrop of growing anxiety over the fate of the institution.
The bank initially had its operating license revoked by the Central Bank of Nigeria (CBN) but challenged the latter’s decision in a court of law.
Though its license was subsequently restored, it had been unable to resume banking operations mainly because of its inability to meet the prescribed capital requirements by the apex bank.
Addressing journalists as part of activities to kick-start events scheduled to commemorate the 30th anniversary of the corporation, Ibrahim said Savannah Bank should be able to commence operation as soon as it scales the recapitalisation hurdle, which was being addressed with the CBN.
On the issue of virtual currency which many Nigerians have keyed into for financial rewards, the MD, who was represented by Director, Corporate Communication and Public Affairs, NDIC, Dr. Sunday Oluyemi, maintained that though anyone was at liberty to invest in digital products, it should be undertaken with utmost caution as the corporation currently do not provide guarantee for operations in the virtual currency world.
But he said subscribers of licenced mobile money operators are covered by NDIC in any event of failure.
Meanwhile, Ibrahim, disclosed that to date, the NDIC had paid a cumulative sum of over N11.92 billion to depositors of failed financial institutions.
He said the sum N8.25 billion was paid as insured amount to 442,999 depositors of closed Deposit Money Banks (DMBs); while over N2.97 billion was also disbursed to 83,415 depositors of closed microfinance banks (MFBs) as well as over N70.53 million paid to 869 depositors of closed (primary mortgage banks (PMBs).
Nevertheless, the MD said the commemoration of its 30th anniversary provides an excellent opportunity to undertake a comprehensive review of NDIC’s past legacies and a platform to fine-tune its vision and mission as well as to cast a searchlight on the future, particularly the challenges and opportunities.
The corporation was established in March 1989 following the promulgation of Decree No. 22 of 1988, now replaced with NDIC Act 16 of 2006.
The public policy objectives of the corporation are to contribute to financial system stability as well as to protect small and less financially sophisticated depositors by providing an orderly means of resolution and compensation in the unlikely event of failure of their insured financial institutions.
The NDIC boss deposit insurance scheme (DIS), which. is a key mandate of the corporation covers all deposit-taking financial institutions licensed by the CBN which including DMBs, MFBs, PMBs, Non-Interest Banks (NIBs) and subscribers of Mobile Money Operators (MMOs).
He added that the corporation currently provides deposit insurance cover to 27 DMBs, 918 MFBs, 34 PMBs and two NIBs.
He said the NDIC continues to demonstrate great ingenuity and sagacity in failure resolution.
According to him:”At inception in 1989, the banking system was already in distress with seven technically Insolvent state-owned banks. The experience garnered by the corporation in those early years have proved invaluable. Depending on severity and peculiarity, NDIC in collaboration with the CBN had adopted multiple resolution options to resolve failures in the system.
The NDIC chief executive said: “In light of the foregoing, it is gratifying that in 30 years since its establishment, the corporation has fulfilled the public policy objectives for which it was established.
“Therefore, the corporation has lined up a series of activities to celebrate its remarkable achievements in the past 30 years as well as give honour to its founders who have left a legacy of excellence in service and commitment to the stability of the financial system.”
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