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More takeaways from NDIC Editors Forum

The NDIC Editors Forum, an annual event since it debuted in 2012, is an important platform for updating knowledge of key players in the media...

The NDIC Editors Forum, an annual event since it debuted in 2012, is an important platform for updating knowledge of key players in the media. It is an interactive platform between the NDIC’s executive management and the senior stakeholders in the media on the corporation’s mandate and contributions to the nation’s financial system stability, the challenges being confronted and the way forward. Even more than that, it is so designed to keep editors informed of topical issues in the financial services industry on an ongoing basis.

I have been privileged to attend the forum consecutively for the third time now, and I have always come away with a better understanding of what the financial safety nets are doing to keep our funds safe and tidy. This year’s forum held on penultimate Saturday in the Providence by Mantis Hotel in Ikeja, had an added significance by the attendance of the newly-appointed NDIC Managing Director, Bello Hassan, and his entire management staff. It was gratifying having the chief executive staying and interacting with the attendees throughout the duration of the programme, interjecting answers and other clarifications where necessary.

The theme of this year’s forum, ‘Enduring Extreme Disruptions: Resilience and Reinvention for Banking System Stability and Deposit Insurance’, was just appropriate for these times when the country, like other parts of the world, is battling with the destructive effects of the COVID-19 pandemic. The NDIC chief in his keynote address had harped on the resilience of the corporation in the face of these disruptions and the reinvention strategies they have embarked upon to mitigate the situation.

Listening to the managing director, it is gladdening to note that he is quite at home with issues NDIC is confronting. NDIC can count as one government organisation that has had the luck of stable leadership, with the captains of the ship always appointed from the safety of the Central Bank of Nigeria (CBN) and the NDIC. In its 30 years existence, the NDIC has had only four Chief Executives. The pioneer MD, John U. Ebhodaghe and the second, Ganiyu Ogunleye, were directors in the CBN prior to their appointment while the third MD, Umaru Ibrahim, was a foundation staff of the NDIC. Bello Hassan, who took over this year, is a thoroughbred central banker. He joined the CBN in 1990 and has over the years worked in the Operations Directorate and the Examination/Supervision Department. He was appointed the Director of Financial Institutions Supervision Department in 2019 and was moved to Banking Supervision Department last year. Probably that’s why his appointment was lauded as one of a round peg in a round hole.

One also noted that the immediate attention of the MD and the management team has been to put on the ground policies and strategies that should mitigate the dreadful impact of the pandemic COVID-19. Obviously a rampant disease outbreak affecting the entire universe leading to lockdowns was bound to have deleterious effects particularly on banks and other financial institutions. Probably the effects on our banks is yet to manifest and is being studied and monitored closely by both the CBN and NDIC. What is important is the assurance by the MD that the NDIC is ready for any untoward repercussions. He based that confidence on the grounds that the key policy thrust of his new management is “to scale up the deposit insurance framework; timely support to insured institutions as and when required; faster and orderly resolutions of failed insured institutions; as well as assisting the monetary authority in promoting stability in the banking system.”

Added to this, the NDIC has had an effective and tested bank failure resolutions in the form of bridge banking. The unique advantage of bridge banking has seen to the payment of guaranteed sums to depositors and liquidation dividends to shareholders in the event of bank failure, that is besides saving hundreds of jobs. In his words the NDIC had “paid a cumulative sum of N8.3 billion to 443,946 insured depositors and N100.1 billion to uninsured depositors of DMBs in-liquidation as at 30th September, 2021 while N3.4 billion was paid to 90,945 insured depositors of microfinance banks and N1.2 million to uninsured depositors. In the same vein, cumulative insured amount paid to 1,553 depositors of closed primary mortgage banks as at 30th September, 2021 stood at N110.2 million while N7.9 million was paid as uninsured deposits.’

That’s certainly something to crow about. But I guess the NDIC can even do better if the new management puts more efforts in getting the NDIC Act 2006 reviewed, to bring it up to the realities of the times. Undoubtedly, the 2006 Act is an improvement on the NDIC 1988 Act, but many legal challenges that have come up after the enactment of the NDIC Act 2006 have made it imperative for a review. It is a pity that the review has been having a clay-footed journey started in the 8th National Assembly. There is need to have the roles of the NDIC and the CBN clearly spelt out, being independent organs, to avoid unnecessary duplication. Most importantly, we expect stiffer deterrents on directors of banks, that enable the banking industry to ensure compliance with available laws and regulation, in order to stem failure. It is unfair to see the directors of failed banks strutting about when they should be cooling their heels behind bars.

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