The Senate Committee on Banking, Insurance, and other Financial Institutions has praised the Nigeria Deposit Insurance Corporation (NDIC) for its efforts in managing the liquidation of Heritage Bank and increasing deposit insurance coverage, steps seen as crucial for strengthening Nigeria’s financial safety net.
This commendation was given on Saturday by Senator Adetokunbo Abiru, Chairman of the committee, during the Stakeholders Retreat of the Senate Committee, held in Lagos.
The event, themed “Building Resilient Financial Systems through Effective Legislative Interventions,” focused on discussing NDIC’s role in stabilizing the financial sector amid emerging economic challenges.
The Central Bank of Nigeria (CBN) appointed NDIC as the liquidator of Heritage Bank in June following the revocation of the bank’s operating license, with the Corporation subsequently refunding a substantial portion of depositors through the Bank Verification Number system.
Senator Abiru emphasized the critical nature of NDIC’s role, stating, “Another critical area that deserves commendation is the NDIC’s role in resolving the issues surrounding the failed Heritage Bank.
Your efforts in this regard have not gone unnoticed, and I applaud the NDIC for its diligence and commitment to restoring hope to those affected.”
He further encouraged NDIC to maximize the remaining assets of Heritage Bank to benefit its stakeholders, including depositors and other creditors.
“I urge the corporation to ensure that maximum value is realized from the bank’s remaining assets, which will ultimately contribute to the settlement of outstanding depositors and other creditors,” he added.
Abiru highlighted the importance of expediting asset liquidation processes to protect depositors and minimize financial disruption.
“The financial system relies on the ability of institutions like the NDIC to execute asset liquidations without unnecessary delays while maximizing the recovery for stakeholders,” he noted, expressing confidence in NDIC’s capabilities to manage the process efficiently.
In a significant policy shift, Abiru lauded NDIC’s decision to increase deposit insurance coverage for commercial banks from N500,000 to N5 million, which covers nearly 99% of depositors.
“This policy adjustment is a testament to the NDIC’s responsiveness and its drive to mitigate risks that depositors may face in our financial institutions,” he stated.
“The NDIC has again shown its commitment to adapting to the changing economic landscape and ensuring that the interests of small depositors, in particular, are fully protected.”
Abiru also addressed the growing threats of cyberattacks in Nigeria’s financial sector, emphasizing the need for robust legislative frameworks.
“As we continue to embrace digital banking and financial technologies, the threats posed by cybercrime and data breaches are becoming more pronounced,” he cautioned.
He called for enhanced regulatory oversight and greater investment in cybersecurity measures, pointing to recent incidents that underscore the necessity of these protections.
Echoing the senator’s sentiments, NDIC’s Managing Director and Chief Executive Officer, Bello Hassan, reassured stakeholders of the Corporation’s dedication to consumer protection and transparency.
“Recognizing the relevance of protecting consumers within the financial system, the corporation has been actively complementing the consumer protection efforts of the CBN,” Hassan said.
He highlighted NDIC’s initiatives in public awareness and financial literacy to reduce fraud against small depositors, thereby boosting confidence in the banking system.
Hassan also noted NDIC’s progress in liquidation and debt recovery activities, mentioning a record of 100% liquidation dividends to depositors of over 20 liquidated banks.
“We have invigorated our liquidation activities and greatly increased the debt recovery rate, leading to the declaration of 100% liquidation dividends,” he said, adding that the Corporation has improved its processes to promote accountability and transparency.
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