NDIC Set to Disburse N16.18 Billion Liquidation Dividend to Depositors of 20 Failed Banks

In a recent announcement, the Nigeria Deposit Insurance Corporation (NDIC) has expressed its preparedness to initiate full liquidation dividend payments amounting to N16.18 billion for depositors affected by the closure of 20 failed banks. This disclosure was made by Mr. Bello Hassan, the Managing Director of NDIC, during the NDIC Day at the 44th Kano International Trade Fair.

Depositors are urged to present themselves for verification to facilitate the disbursement of deposits exceeding the guaranteed sums, commonly known as “liquidation dividends.” The ongoing process involves recovering debts and selling the physical assets of the closed banks.

Mr. Hassan highlighted that the payments are currently in progress, and depositors with funds surpassing the guaranteed limits will be entitled to receive liquidation dividends. He emphasized the importance of understanding that in the unfortunate event of a bank failure, the insurance coverage for depositors varies among different types of banking institutions.

The NDIC has already disbursed N1.5 billion to 41,034 depositors of 129 Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs). Mr. Hassan explained the varying insurance limits, stating, “While depositors of Deposit Money Banks, Primary Mortgage Banks, Non-Interest Banks, Payment Service Banks, and subscribers of Mobile Money Operators are insured up to a maximum limit of N500,000 per depositor per bank; for depositors of Microfinance Banks, the maximum insurance limit stands at N200,000 per depositor per bank.”

He further added, “These insured limits undergo process reviews by the Board of the Corporation, ensuring comprehensive coverage for the majority of depositors. Furthermore, depositors holding balances exceeding the insured sums receive regular payments of the excess in the form of liquidation dividends, which also extends to the benefit of creditors and shareholders of the respective banks.”

Highlighting the collaborative efforts with the Central Bank of Nigeria (CBN), Mr. Hassan assured that the NDIC would persist in working with the CBN to effectively oversee banks and ensure adherence to procedures, guidelines, and the Code of Corporate Governance for banks.

Encouraging the public, he emphasized the importance of consistently securing funds in licensed banks rather than keeping them at home or in shops. This serves as a reminder of the vital role played by regulatory bodies in maintaining the stability and integrity of the banking sector.

As the NDIC continues its mission to protect depositors and maintain financial stability, the disbursement of liquidation dividends marks a significant step in providing relief to affected depositors and contributing to the overall confidence in the banking system. Infostride News will continue to monitor and report on developments related to this important financial matter.