One little thing NDIC must amend

The Nigeria Deposit Insurance Corporation (NDIC), I usually tell people, is Nigeria’s best-run public institution, bar none. I have not told the few friends I have there and they may not know themselves, but as someone whose business takes to sundry organizations around the country, it is what I feel strongly about. The corporation spun out of the Central Bank of Nigeria in the year 1988 with the pioneer MD being Mr John Ebodaghe, followed by Mr G. A. Ogunleye who were directors at CBN. The MD today is Alhaji Umaru Ibrahim, who has maintained that standard of professionalism for which the insurance company is known. Yes, it is an insurance company, plain and simple.  I can say that the corporation has maintained the highest levels of professionalism at every point that I have interacted with them, and even when I have observed its activities from afar. I could even wager that they are now far ahead of their ‘parent company’, the CBN in terms of standards and the ability to maintain a strict course. Even though our intellectuals would rather read case studies of American Fortune 500 companies, I have often looked at this corporation as a role model of sorts, whose activity and culture needs to be documented, just as others who could not stay the course and are on a downward spin should be noticed. The pioneer management of NDIC must have been an extremely serious-minded bunch, but perhaps more serious-minded are those who have maintained the tempo, because organizational culture is a marathon race. 

I recall a couple of training programs that my organizations handled with NDIC in the past and how keen-minded the Directors were; issuing stern warnings to all staff about punctuality and also leading by example.  In terms of knowledge, the corporation has build a formidable repertoire amongst its staff. They are no walkovers. In NDIC, training is not some ritual you undertake just to obtain estacodes or duty tour allowances as it has become in almost every other ministry, department and agency.  We who are on the outside know what the score is. We are like the football enthusiasts who watch from the convenience of their homes. We know which teams are playing well even if our opinions are never sought. I was telling one staff in one of the larger institutions lately that they should ordinarily seek the input of their trainers/consulting firms before going to press yearly with their training plan, so that we can at least tell them how things are elsewhere. It felt like I was speaking Greek. 

But why am I writing about NDIC this week? 

I saw an advert in Daily Trust of March 14, 2018 from NDIC, which called on creditors of Ivory Merchant Bank, Icon Merchant Bank, Financial Merchant Bank, Commercial Trust Bank and Merchant Bank of Africa, to come forward for verification with proof of what these banks were owing them, as the insurance corporation was now ready to pay such creditors subject to whatever amount it had realized from the carcasses of the banks. 

Well, for me it was a throwback. Each of these banks went with the Abacha Tsunami of the mid 1990s. I could remember that Merchant Bank of Africa was in St Nicholas House. Ivory was somewhere in Oyin Jolayemi, CTB was around Maroko, near Mobil. Financial Merchant Bank? Was that not the one bled to death by one Otunba? Icon? Ha Icon Merchant Bank! That is the blue skyscraper at Idejo. These were banks of my youth, when I was a starry eyed bank worker, reminiscing about how great it could be to work in some of them as I walk past each of their well-manicured, well-choreographed frontages. We didn’t know that some of the deals that went on in them made absolutely no sense. Many private-sector liberalist exponents will try and convince us today about how squeaky-clean private sector organizations are but in truth many of them degenerate worse than could ever be the case in the public sector, and many still do. Imagine a bunch of banks directors, competing to steal from a bank, when it is in their better interest that the bank continues to prosper into the long-run. Almost none of the banks that were established as partnerships – including Citizens where I worked – made it into the future. It was banks like Zenith, run solely by Mr Jim Ovia, which became behemoths and has achieved unimaginable feats today. 

Anyway please forgive my reverie into my age of hope and innocence. 

I am about NDIC today. When I saw that advert I wondered if it was some cruel joke. I imagined if I was a ‘creditor’ – meaning a depositor with any of these banks as at then. I imagined the 22 years waiting period for me to get this notice, and the added requirement of someone asking me to bring proof. I imagined the value of money then, and now. In 1996, my yearly salary as a well-paid bank worker would have been anything like N100,000 per annum – or N9,000 per month. Since then, Naira has devalued from N22 to N305 in the official market, and N85 in the parallel market to N360. Compounded inflation since 1996 till date, in a country where inflation gallops at double digit yearly, could be anything like 300% (even if we assume 10% per annum). One Naira in 1999 could be anything like N100 Naira today (given that Naira has tumbled 15 times over, and 300% compounded inflation means the value of the currency has eroded and bottomed out, at least thrice over). It’s a terrible scenario that we have found ourselves in the hands of our non-leaders and plunderers, as well as the band of economic hitmen who ‘advise’ them to run us all into trouble.

When I made a comment on this matter on my facebook page, a friend suggested that at least the NDIC had upped the insured value of bank deposits from N150,000 to N500,O00 today. I still feel that this is grossly inadequate given that a lot of bank deposits are over N500,000 today.  I then investigated how deposit insurance works in countries like the USA from where the idea was imported to Nigeria. In the USA, the maximum insured deposit is $250,000, which is approximately N90,000,000 (ninety million Naira).  Imagine the gap. Not only that, the FDIC – the US equivalent of our NDIC – promises all depositors that there will not be even a one minute delay if ever their bank goes down. Access to your deposit up to $250,000 is immediately guaranteed. What is more? An average US depositor is advised to split their deposits into tranches of $250,000 to ensure they are covered fully at all times. No where did I find that people will have to wait 22 years (or even 1 year) to get a resolution on what they are owed by the banks. 

I must confess. When I resumed work with Standard Trust Bank in 1998, we had many family members of dead customers of the defunct Crystal Bank which we had taken over come to plead to get access to the funds of their deceased benefactors who could not have access to their own funds even on their death beds.  I put myself in these people’s shoes and it just cannot be right to wait so long.  We can put it down to bad luck, but I believe the NDIC can do itself and all of us a favour, in spite of the CBN guarantee than no bank will ever fail, and increase the insured amount to N5,000,000 and also ensure much more timelier resolution of these issues.