Managing Director, Nigerian Deposit Insurance Corporation, Alhaji Umaru Ibrahim, in a question and answer session, at the just concluded workshop for financial journalists, held in Kano, vowed to personally present the destabilised and troubled Northeast region to the Bankers’ Committee, with a view to ensuring that banks that fled the zone in the heat of Boko Harm insurgency, return. NGOZI AMUCHE was there. Excerpts
The Central Bank of Nigeria, in conjunction with the NDIC, is making a move to make commercial banks and microfinance institutions return to the troubled North East region of the country. What is the idea behind this?
The North East has great potential to support economic growth in Nigeria, and we feel that it should be supported by banks to achieve the desired result. Many banks’ Chief Executive Officers have forgotten the economic potential that exist in the North East. We need to awaken the banks to see the economic benefits in the region.
During the next special Bankers’ Committee meeting, the North East infrastructural revival will be discussed. The CBN has already planned to rebuild the North East. This will be made possible if the apex bank will provide incentives for the financial institutions to come back to the North East after they have closed shop because of the impact of the Boko Haram insurgency on their operations.
This is very important, following the activities of insurgents in the region in the last few years, which have led to huge damage of financial infrastructure in the region. However, given the crisis in the region, so many businesses have been adversely affected, while some investors have moved their investments out of that region.
I will personally table the issue to the Bankers’ Committee during their next meeting so that concrete steps could be taken to address the problem.
Can you throw more light on the claim by the NDIC to have paid more than N100 billion to depositors of liquidated Deposit Money Banks in the country?
The payments were not done in secret. They were always published in newspapers, and reported on radio and television stations whenever insured deposits and uninsured deposits were due for payment. Apart from that, the institution has doubled its efforts by providing an enabling regulatory and supervisory environment that ensures small savers are protected.
We, however, implore those depositors who have not responded to our calls to come forward and collect their insured deposits and liquidation dividends already declared for uninsured deposits.
You recently warned members of the banking public on the danger of digital currencies like Bitcoins, saying they are not legal tenders in Nigeria. What does this portend?
The protection of the depositors remains the top priority of the Corporation. There is the need for depositors to patronise only financial institutions that are licensed by the Central Bank of Nigeria and which display the NDIC sticker with the words, “Insured by NDIC”, in their banking hall or entrances.
The result is the loss of vital savings and sometimes disastrous consequences to the lives of the victims. Also, the emerging trend of investing in digital currencies, popularly known as Bitcoin, is equally dangerous because just like wonder bank, the digital currencies are not licensed by the CBN and therefore not insured by the NDIC.
It is for this reason that I must sound a note of warning against patronising dubious fund managers, otherwise known as “Wonder Banks”. They persuade their unsuspecting victims to part with their hard earned money with promises of interest rates that are unrealistically high as the returns of their investments.
Wonder banks are like armed robbery or burglary or any kind of crime. Nobody can stamp them out but the best thing we can do is to keep our ears to the ground and continue to sensitise the general public; they should beware of the people who come around with cock and bull stories or promise mouth-watering returns.
You think there will be a resurgence of wonder banks in the near future?
Not really; as soon as we get to know about them, we move in quickly with security agencies to clamp down on them. We do investigations on their existence, under what licence they operate, who the victims are, and so on and so forth?
The issue of non-performing loans has been on the increase. What is the NDIC’s position on this to make sure it does not crystalise into loss of depositors’ funds?
There are a lot of factors that culminated into this. Some of them have to do with the state of the affairs of the economy, falling oil prices, FX issues, issues relating to energy, the prevailing economic conditions that have made it difficult for borrowers, big and small, to meet their obligations to the banks. There are some internal factors that have to do with the quality of the loans, concerning the way they were granted.
During the next special Bankers’ Committee meeting, the Northeast infrastructural revival will be discussed. The CBN has already planned to rebuild the Northeast. This will be made possible if the apex bank will provide incentives for the financial institutions to come back
In recent times, you have been engaged in series of awareness campaign on financial literacy. What’s the rationale behind this?
What we do is to facilitate financial literacy and create awareness about deposit insurance, especially calling on depositors whose monies are still unclaimed in the 14 banks in liquidation to come and file their claims in our offices that are nationwide and through agent banks.
We are part of the Bankers Committee and there is a roadmap; there is a plan for achievement of financial literacy into which all of us have keyed into. The CBN and all the members of the financial sector services regulatory committee, all the banks, every individual organisation, have their bits to do.
NDIC would continue to be at the forefront of driving the key objectives of the National Financial Inclusion Strategy to reduce the percentage of adult Nigerians that do not have access to financial services, as a way to meet the 20 per cent exclusion rate