Nigeria Deposit Insurance Corporation
Encyclopedia
The Nigeria Deposit Insurance Corporation (NDIC) was established on 15 June 1988 to strengthen the safety net for the newly liberalized banking sector, following the recommendation of former Central Bank of Nigeria
governor Ola Vincent
. The NDIC provides a safety net for depositors in the newly liberalized banking sector..
. The corporation is charged with protecting the banking system from instability occasioned by runs and loss of depositors' confidence.
It operates under the Nigeria Deposit Insurance Corporation Act (1990).
The NDIC is a member of the Financial Reporting Council of Nigeria
.
The NDIC complements the regulatory and supervisory role of the Central Bank of Nigeria
(CBN), although it reports to the Federal Ministry of Finance
. The NDIC advises the CBN in the liquidation of distressed banks and manages distressed banks' assets until they are fully liquidated.
The NDIC has a supervisory role over insured banks. In April 1996, the Chief Executive of NDIC said that the corporation had 514 case files of insider abuse and corruption for the police to prosecute.
In December 2007, the NDIC announced that as of January 1, 2008 it would start providing deposit insurance services to microfinance institutions in Nigeria.
, issued a notice revoking the license of Savannah Bank
, saying the bank did not have enough assets to meet liabilities and did not comply with CBN obligations, and that the regulators had prevent further deterioration. The NDIC took over as liquidator, sealing the bank's offices. The matter dragged through the courts, with the bank's owners eventually being awarded damages of N100 million in February 2009.
Under a Purchase & Assumption arrangement, the NDIC may arrange for the assets and liabilities of a failed bank to be taken over by another bank. For example, in October 2007 the United Bank for Africa assumed the fixed assets and private sector deposit liabilities of African Express Bank under direction of the CBN and the NDIC.
At times, the NDIC has been caught up in controversy over legal actions against managers and others who have caused insured banks to fail.
Shortly before his retirement in July 2009, the Nigeria Deposit Insurance Corporation accused the Inspector General of Police Mike Okiro
of failing to repay a N166 million loan he obtained between 2000 and 2001 from the Lead Bank, since liquidated.
Central Bank of Nigeria
The Central Bank of Nigeria was established by the CBN Act of 1958 and commenced operations on July 1, 1959.The major regulatory objectives of the bank as stated in the CBN act of 1958 is to: issue legal tender, maintain the external reserves of the country, promote monetary stability and a sound...
governor Ola Vincent
Ola Vincent
Ola Vincent is a Nigerian economist and banker who was Governor of the Central Bank of Nigeria between 1977 and 1982.-Birth and education:Vincent was born on 16 May 1925 in Lagos...
. The NDIC provides a safety net for depositors in the newly liberalized banking sector..
Organization
The NDIC is a parastatal under the Nigerian Ministry of FinanceNigerian Ministry of Finance
The Nigerian Ministry of Finance is the government body that manages the finances of the Federal Government of Nigeria, including managing, controlling and monitoring federal revenues and expenditures.-Services:...
. The corporation is charged with protecting the banking system from instability occasioned by runs and loss of depositors' confidence.
It operates under the Nigeria Deposit Insurance Corporation Act (1990).
The NDIC is a member of the Financial Reporting Council of Nigeria
Financial Reporting Council of Nigeria
The Financial Reporting Council of Nigeria , formerly the Nigerian Accounting Standards Board , is an organization charged with setting accounting standards in Nigeria.-Nigerian Accounting Standards Board:...
.
The NDIC complements the regulatory and supervisory role of the Central Bank of Nigeria
Central Bank of Nigeria
The Central Bank of Nigeria was established by the CBN Act of 1958 and commenced operations on July 1, 1959.The major regulatory objectives of the bank as stated in the CBN act of 1958 is to: issue legal tender, maintain the external reserves of the country, promote monetary stability and a sound...
(CBN), although it reports to the Federal Ministry of Finance
Finance Minister of Nigeria
The Minister of Finance of Nigeria is a senior cabinet official in the Nigerian Federal Executive Council. The Finance Minister's directs the Nigerian Ministry of Finance and ensures that it operates in a transparent, accountable and efficient manner to bolster the country's economic development...
. The NDIC advises the CBN in the liquidation of distressed banks and manages distressed banks' assets until they are fully liquidated.
The NDIC has a supervisory role over insured banks. In April 1996, the Chief Executive of NDIC said that the corporation had 514 case files of insider abuse and corruption for the police to prosecute.
In December 2007, the NDIC announced that as of January 1, 2008 it would start providing deposit insurance services to microfinance institutions in Nigeria.
Activity
In February 2002, the governor of the Central Bank, Joseph Oladele SanusiJoseph Oladele Sanusi
Chief Joseph Oladele Sanusi is a Nigerian chartered accountant who was Governor of the Central Bank of Nigeria from May 1999 to May 2004.-Background and qualifications:...
, issued a notice revoking the license of Savannah Bank
Savannah Bank
The Savannah Bank is a Nigerian bank whose license was withdrawn in February 2002 and restored in February 2009 after protracted legal battles....
, saying the bank did not have enough assets to meet liabilities and did not comply with CBN obligations, and that the regulators had prevent further deterioration. The NDIC took over as liquidator, sealing the bank's offices. The matter dragged through the courts, with the bank's owners eventually being awarded damages of N100 million in February 2009.
Under a Purchase & Assumption arrangement, the NDIC may arrange for the assets and liabilities of a failed bank to be taken over by another bank. For example, in October 2007 the United Bank for Africa assumed the fixed assets and private sector deposit liabilities of African Express Bank under direction of the CBN and the NDIC.
At times, the NDIC has been caught up in controversy over legal actions against managers and others who have caused insured banks to fail.
Shortly before his retirement in July 2009, the Nigeria Deposit Insurance Corporation accused the Inspector General of Police Mike Okiro
Mike Mbama Okiro
Sir Mike Mbama Okiro was the Inspector General of the Nigeria Police Force from 2007 - 2009.-Background:Mike Okiro was born on July 24, 1949 in Oguta, Imo State...
of failing to repay a N166 million loan he obtained between 2000 and 2001 from the Lead Bank, since liquidated.