The Nigeria Deposit Insurance Corporation (NDIC) has raised concerns over the growing challenges facing efforts to recover loans owed to failed financial institutions, accusing some borrowers of deliberately frustrating the process through asset concealment, court delays and intimidation.
The corporation warned that the actions of these debtors could further delay the recovery of funds belonging to depositors whose money remains tied up in liquidated banks.
The Director of the Asset Management Department of the NDIC, Ogungbemi Theophilus, disclosed this on Monday during the Stakeholders’ Seminar and Public Relations Workshop held in Abuja.
Speaking about the difficulties encountered during the liquidation of failed banks, Theophilus explained that some borrowers wrongly assume that the revocation of a bank’s operating licence automatically cancels their outstanding loan obligations.
He alleged that some debtors resort to hiding their assets, frustrating legal processes and using intimidation tactics to avoid repaying loans owed to the affected institutions.
According to him, the corporation remains determined to pursue legitimate recovery efforts professionally, regardless of the challenges involved.
The NDIC director stressed that outstanding loans do not disappear simply because a financial institution has collapsed.
He explained that recovering loans after a bank has been liquidated can become particularly difficult, especially when borrowers had already defaulted before the institution lost its operating licence.
Theophilus also warned that prolonged delays in recovering loans and disposing of properties could significantly reduce the value of assets available for liquidation.
He noted that buildings left unused for extended periods could deteriorate, while equipment and other physical assets could lose value over time.
Such developments, he explained, would negatively affect the amount of money eventually recovered and distributed to depositors.
“Every delay slows payment to depositors,” he warned.
Why Some Customers Of Failed Banks May Wait Longer For Their Money
The NDIC director explained that the corporation’s Asset Management Department oversees the recovery and management of outstanding loans, physical properties and investments belonging to failed deposit money banks, primary mortgage banks and microfinance banks.
Its responsibilities include recovering unpaid loans, selling properties and investments, and converting recovered assets into cash for distribution to eligible depositors.
He emphasised that the ability of the corporation to pay customers whose deposits exceed the insured limits depends largely on how successfully it recovers the outstanding debts and assets of liquidated financial institutions.
How Much Money Does NDIC Protect For Bank Customers?
The corporation also outlined the existing deposit insurance limits available to customers of different categories of financial institutions.
According to Theophilus, depositors of deposit money banks, non-interest banks and mobile money operators are insured up to ₦5 million per depositor per bank.
Meanwhile, customers of microfinance banks, primary mortgage banks and payment service banks enjoy insurance coverage of up to ₦2 million per depositor per bank.
He explained that the current insurance framework provides full protection for approximately 99 per cent of depositors.
However, customers whose deposits exceed the insured limits may have to depend on liquidation dividends for the recovery of their remaining balances.
The NDIC’s warning highlights the importance of loan recovery in protecting depositors and ensuring that customers of failed financial institutions receive the money they are entitled to.
As the corporation continues its efforts to recover outstanding debts and dispose of liquidated assets, the conduct of defaulting borrowers remains a major challenge to the timely settlement of depositors’ claims.
