The Nigeria Deposit Insurance Corporation has expressed concern over the refusal of some debtors of failed banks to repay outstanding loans, accusing them of hiding assets, delaying court proceedings and intimidating recovery officials. The corporation warned that these actions were slowing efforts to recover depositors’ funds and settle outstanding claims.
The Director of the NDIC Asset Management Department, Ogungbemi Theophilus, raised the concerns on Monday at a stakeholders’ seminar and public relations workshop in Abuja. He said some borrowers wrongly assumed that the revocation of a bank’s operating licence relieved them of their repayment obligations.
Theophilus described loan recovery as one of the most difficult aspects of bank liquidation, noting that unpaid loans often become harder to recover after a financial institution shuts down. He added that delays in recovering debts and selling physical assets could reduce their value, as unoccupied buildings deteriorate and equipment loses value.
He explained that the Asset Management Department oversees loans, properties and investments belonging to closed deposit money banks, primary mortgage banks and microfinance banks. Its responsibilities include recovering debts and converting assets into cash to settle claims by uninsured depositors.
The director said depositors of deposit money banks, non-interest banks and mobile money operators were insured up to ₦5m per depositor per bank, while customers of microfinance banks, primary mortgage banks and payment service banks had coverage of up to ₦2m. He noted that about 99 per cent of depositors were fully covered, while customers with balances above the insured limits depended on liquidation proceeds for additional payments.
Theophilus disclosed that the corporation conducted public auctions on November 3 and 4 to sell physical assets belonging to Union Homes Savings and Loans, Heritage Bank, and Resort Savings and Loans. The exercises took place in Lagos, Taraba and Adamawa states.
He warned that recovery costs must remain proportionate to the value of assets recovered and cautioned professionals against insider dealing, undervaluation and diversion of proceeds.
He added that the NDIC was developing a comprehensive Asset Management Policy to improve asset identification, valuation, documentation and disposal procedures. The corporation also plans to strengthen collaboration with auctioneers, valuers, surveyors and other professionals to accelerate recoveries and payments to depositors awaiting their funds.
