NDIC warns against criminal infractions in recovery

By Christopher Oji

The Nigeria Deposit Insurance Corporation (NDIC) has warned faild Banks and other debtors against criminal infractions.

The Corporation warned that any infraction discovered in its quest to recover about N1.5 trillion owed to liquidated Deposit Money Banks (DMBs) and Microfinance Banks (MfBs), would not be treated with Kidsgroves as those involved would be arrested and handed to the appropriate authorities for proper prosecution.

The Corporation during a sensitization seminar for NDIC debt recovery agent, recently in Lagos,said that the federal government has given it the mandate to bring sanity in the financial sector by recovering the huge sum of money owed depositors.

The move, the Corporation said, is aimed at accelerating reimbursement to depositors, many of whom are market women, small business owners and Point-of-Sale, POS, operators affected by the bank failures.

Speaking at the sensitisation seminar organised by the Legal and Asset Management Departments of NDIC for debt recovery agents themed: “Operationalising the Provisions of the NDIC Act 2023 for Effective Debt Recovery,” Director, Legal Department, NDIC, Mr. Olusunmi Kushimo, said debt recovery remains critical to depositor reimbursement and financial system stability.

According to him, while the Corporation pays insured deposits from its insurance fund, the recovery of outstanding debts is crucial for settling uninsured deposits and liquidation dividends.

“The work of NDIC is to provide financial assistance and guarantee deposits. Debt recovery is very key to depositor reimbursement. We pay the insured deposits from our insurance fund, but for the uninsured portion, recovery of debts owed to the failed banks is essential,” he said.

He noted that many of the affected depositors are low-income earners whose funds exceed the insured limits, stressing that timely recovery would enable the Corporation to pay liquidation dividends promptly.

Kushimo explained that the NDIC Act 2023 has enhanced the Corporation’s powers, providing stronger enforcement mechanisms to facilitate faster and more efficient debt recovery.

“The Act has enlarged our powers to recover debts owed by delinquent debtors, including insider-related accounts, and to identify criminal infractions for prosecution by relevant agencies. Early enforcement is critical because of the time value of money,” he added.

He urged the recovery agents to familiarise themselves with the new provisions of the Act and leverage the enhanced legal tools to improve recovery outcomes, noting that weak loan repayment culture and protracted litigation have hindered past recovery efforts.

Also speaking, Director, Asset Management Department, NDIC, Patricia Okosun, said the objective of the seminar was to equip recovery agents with additional tools introduced under the new Act.

“We now have an NDIC Act that has strengthened debt recovery. The essence of this seminar is to sensitise our recovery agents on the new provisions and tools available to them, in addition to what they have been doing,” she said.

Okosun expressed optimism that the enhanced framework would enable the Corporation to recover more debts within a shorter time, thereby improving its capacity to reimburse depositors.

“The earlier we recover, the better, so we can pay our depositors. We are optimistic that with these new tools, we will recover as much as possible. When banks are in crisis, the economy collapses, that is why we must recover all the money owe depositors, so that our economy won’t collapses,” she said.

On his own, a guest lecturer, Faculty of Law, University of Lagos, Professor Akeem Bello, warned that the Corporation Bank directors and other shareholders should be conscious of criminal infractions in any business they are involved in ,as there are extant laws to prosecute any wrong doing.

“ Directors in the banks should no that when they turn depositors money to their family property, they should be prosecuted and there are laws that will not spare them. Recovery agents should ask questions and report any criminal infections to the NDIC, who inturn will take the matter to the police , Economic and Financial Crimes Commission or the Independent Corrupt Practices and Other Related Offences Commission (ICPC) for proper arrest and prosecution.

“ It is your duty to recover all the money in our failed banks. Whichever legal means you use to do so, is welcome. Some who should face prosecution, may be reconsidered if they opt for plea bargain, but the die hard criminals who may want to play smart should be reported to the appropriate authorities for proper arrest and prosecution .”