Avoid Wonder Banks, Use Licensed DMBs, NDIC Boss Warns Depositors

The officials of Nigeria Deposit Insurance Corporation (NDIC) at the weekend said the Corporation is seeking more powers to facilitate prompt settlement of depositors’ funds, irrespective of pending litigation filed by former bank owners, who in most cases were responsible for the collapse and failure of the affected banks.

The managing director of NDIC, Alhaji Umar Ibrahim, insisted that NDIC is committed to ensure that the trapped deposited funds were paid during the Corporations special day at the ongoing 36th Kaduna International Trade Fair.

He argued, “though the NDIC has been discharging it’s mandate creditably since its inception 26 years ago, current developments in both national and international financial markets have necessitated the need to improve its operational efficiency as a deposit insurer, which underscored the need for further review of its Act (NDIC Act No 16 of 2006) as amended.”

The NDIC boss also pointed out that the Corporation’s Amendment Bill has passed the second reading at the National Assembly, stressing that by the time the bill is passed into law more powers would be available for NDIC to operate. Said he:

“The amendments to the NDIC Act 2006 would no doubt empower the Corporation to effectively discharge its mandate and also continue to operate in line with global best practices.”

Ibrahim advised Nigerians against patronising illegal fund managers, known as wonder banks, who offer extra-ordinary interest rates on deposits or investments, only to disappear after collecting the deposits or investment. “These illegal operators are not licensed by the Central Bank of Nigeria (CBN), as deposit-taking financial institutions as such are not under the NDIC insurance cover,” he warned.

The managing director, who was represented by the Director, Asset Management Department of the Corporation, Mallam Bashir Umar, stated that the advise became necessary in view of the continued existence of these illegal financial houses operators in different forms, and in various parts of the country, adding, people often approach the Corporation to seek redress after falling victims.

“For the avoidance of doubt, the Corporation wishes to make it categorically clear that only depositors of institutions that are licensed to collect deposits by the CBN, that is Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Primary Mortgage Banks (PMBs) and Non Interest/Islamic Banks are under NDIC insurance cover.”

Ibrahim, therefore, called on the members of the general public to make enquiries or lodge their complaints if they are being short changed by their banks.