Managing director and chief executive of the Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim has said the corporation through its different resolution mechanism in resolving bank failures has so far closed 281 financial institution, as he lamented the lack of enough investible instruments in the nigerian market.
Speaking at the 2018 International Association of Deposit Insurers (IADI) Africa Regional Committee (ARC) workshop in Lagos, last week, Ibrahim said the absence of investment options other than government instruments pose a challenge to the corporation.
“This posture is the same in most African countries and is attributable to the depth of our domestic financial markets with limited range of financial instruments and products” he stated, stressing the need to deepen domestic financial markets.
The NDIC boss said the corporation also faces challenges in fulfilling its statutory function failure resolution and liquidation saying, it has traced them to some inadequacies in the extant laws establishing the corporation. An amendment bill is currently before the national assembly, which if passed would address most of the issues in line with IADI specification.”
Ibrahim said through its failure resolution mechanism, the NDIC had so far closed 52 deposit money banks (DMBs), out of which 49 are currently in liquidation while the remaining are involved in litigations challenging the revocation of their license by CBN.
In the case of other deposit taking financial institutions, a total of 187 Microfinance Banks (MFBs) and 42 primary Mortgage Banks (PMBs) are currently in liquidation. In his welcome address at Nigeria Deposit Insurance Corporation, Ibrahim said regulators in the Nigerian banking industry have been able to achieve relative stability in the sector due to the “smooth coordination and collaboration among safety-net participants.”
Noting that NDIC as one of the resolution authorities in Nigeria, has adopted different resolution mechanisms in resolving the failure of distressed deposit taking financial institutions in the country, he said the failure resolution mechanisms used by the corporation include; Deposit pay out; Purchase and Assumption; Open Bank Assistance; Assisted Mergers; and Bridge Bank.