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The Nigeria Deposit Insurance Corporation (NDIC) has warned debtors of failed banks against concealing assets, frustrating legal proceedings and deploying intimidation tactics to evade repayment of outstanding loans.
The corporation said such practices were undermining efforts to recover funds belonging to depositors and delaying the payment of outstanding claims to customers of liquidated financial institutions.
The Director of the Asset Management Department of NDIC, Ogungbemi Theophilus, raised the concerns on Monday at the Stakeholders’ Seminar and Public Relations Workshop in Abuja.
Speaking on the challenges confronting the corporation in recovering assets of failed banks, Theophilus said some borrowers wrongly believed that the revocation of a bank’s operating licence absolved them of their repayment obligations.
He said the debtors often resorted to hiding assets, frustrating service of court processes, employing delay tactics and intimidating recovery officials.
Theophilus described loan recovery as one of the most difficult aspects of bank liquidation, noting that outstanding debts did not become easier to recover following the collapse of the affected financial institutions.
He warned that delays in recovering loans and disposing of physical assets could significantly reduce their value, thereby affecting the funds available for distribution to depositors.
According to him, buildings left unoccupied for extended periods depreciate, while equipment deteriorates and outstanding loans become increasingly difficult to recover.
The director explained that the Asset Management Department was responsible for managing the loans, physical assets and investments of closed deposit money banks, primary mortgage banks and microfinance banks.
He said the department was mandated to recover outstanding loans, dispose of properties and investments, and convert recovered assets into cash to settle uninsured depositors.
He stressed that the corporation’s ability to compensate depositors whose balances exceeded the insured limits depended largely on the success of the recovery process.
Theophilus said depositors of deposit money banks, non-interest banks and mobile money operators were insured up to N5m per depositor per bank, while those of microfinance banks, primary mortgage banks and payment service banks were covered up to N2m.
He added that the existing coverage fully protected approximately 99 per cent of depositors, while customers with balances above the insured limits depended on liquidation dividends to recover their outstanding funds.
The NDIC director also disclosed that the corporation conducted public auctions on November 3 and 4, 2026, to dispose of physical assets belonging to three banks in liquidation.
He identified the institutions as Union Homes Savings and Loans, Heritage Bank and Resort Savings and Loans, adding that the auctions were held in Lagos, Taraba and Adamawa states through competitive sealed bidding.
Theophilus, however, cautioned against excessive recovery costs, stressing that expenses incurred in recovering debts must not exceed the value of the assets recovered.
He further warned professionals engaged in asset recovery against insider dealing, deliberate undervaluation, collusion with buyers and diversion of proceeds.
Theophilus announced that the NDIC was developing a comprehensive Asset Management Policy to strengthen asset identification, documentation, valuation, disposal procedures and accountability in the recovery process.
He said the corporation would also deepen collaboration with auctioneers, valuers, sales agents, surveyors and other professionals to improve loan recoveries and accelerate the settlement of depositors’ claims.
He explained that the Abuja workshop was part of three stakeholder seminars scheduled for Abuja, Enugu and Lagos to identify operational challenges, strengthen professional relationships and improve asset recovery outcomes.
The director maintained that effective collaboration among stakeholders would ultimately benefit depositors awaiting payment following the collapse of their banks.
Theophilus said: “Some debtors of failed banks believe that because a bank’s licence is revoked, he is not obliged to fulfil his responsibilities anymore. They hide assets. They frustrate service. Employ delay tactics in court. Sometimes, they try to intimidate. But we have to always do our job and professionally too.
“A loan that was not repaid when the bank was alive does not become easier to recover when the bank is dead.Every delay slows payment to depositors.
“For them, the insured payment is only the first instalment. The balance, which is the uninsured deposit, can only be paid as liquidation dividend, from the proceeds of the assets we are able to realize and the loans we are able to recover.
“If it costs us N10m to recover N8m, the depositor has lost. We must be disciplined about costs, timelines and reporting. The Corporation has zero tolerance for insider dealing, under-valuation, collusion with buyers, diversion of proceeds, or any conduct that short-changes depositors.”
