The Nigeria Deposit Insurance Corporation (NDIC) has accused some debtors of failed banks of deliberately frustrating efforts to recover outstanding loans through asset concealment, court delays, and intimidation.
The corporation warned that these actions slow the recovery of funds belonging to depositors and delay the settlement of outstanding claims from customers of liquidated financial institutions.
The Director of the NDIC Asset Management Department, Ogungbemi Theophilus, raised the concerns on Monday at the Stakeholders’ Seminar and Public Relations Workshop in Abuja.
Speaking on the challenges of recovering assets from failed banks, Theophilus said some borrowers wrongly assume that the revocation of a bank’s operating licence frees them from their loan obligations.
He said some debtors hide their assets, frustrate legal processes and use intimidation to obstruct recovery efforts.
“A loan that was not repaid when the bank was alive does not become easier to recover when the bank is dead,” he said.
Theophilus explained that recovering outstanding loans and disposing of physical assets remained major challenges during bank liquidation.
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He warned that prolonged delays could reduce the value of assets available for recovery. Buildings left unoccupied may depreciate, while equipment can deteriorate. Outstanding loans also become harder to recover over time.
“Every delay slows payment to depositors,” he warned.
He said the Asset Management Department manages loans, physical assets and investments belonging to closed 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 to settle claims by uninsured depositors.
The director added that compensation for depositors whose balances exceed the insured limits depends largely on the success of these recovery efforts.
Under the NDIC’s current deposit insurance framework, customers of deposit money banks, non-interest banks and mobile money operators are covered up to N5m per depositor per bank.
Depositors of microfinance banks, primary mortgage banks and payment service banks have coverage of up to N2m.
Theophilus said the existing limits fully protect about 99 per cent of depositors, while customers with balances above the insured limits depend on liquidation dividends to recover their remaining funds.
