NDIC to Pay N16.18 Billion Liquidation Dividends of 20 Banks

To ensure financial stability and rebuild trust in the country’s banking sector, the NDIC is said to have begun the verification and payment of N16.18 billion in liquidation dividends to depositors and other stakeholders of 20 liquidated banks in Nigeria.  This sum is in addition to previous payments of various sums amounting to N45.45 billion as liquidation dividends to the 20 banks as of July 2023. 

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According to the Director of Communication and Public Affairs, BASHIR A. NUHU, the action follows impressive recoveries from debtors and the realisation of bank assets in liquidation. To this end, the Corporation has commenced verification and payment of stakeholders covered by the declarations within 30 days, starting on September 28, 2023.  The aforementioned relevant stakeholders have been requested to visit any of the NDIC’s offices closer to them or go to the claims page on the Corporation’s Website, to download, complete, and submit the verification form with prescribed supporting documents to the dedicated email for the purpose: claimscomplaints@ndic.gov.ng.

The Banks In-Liquidation

The closed banks covered by the exercise are Liberty Bank, City Express Bank, Assurance Bank Century Bank, Allied Bank, Financial Merchant Bank, Icon Merchant Bank, Progress Bank, Merchant Bank of Africa (MBA), Premier Commercial Bank, North-South Bank, and Prime Merchant Bank. Others are Commercial Trust Bank, Cooperative and Commerce Bank, Rims Merchant Bank, Pan African Bank, Fortune Bank, All States Trust Bank, Nigeria Merchant Bank, and Amicable Bank in liquidation.

Significance Of The Action NDIC

The action of the Nigeria Deposit Insurance Corporation (NDIC) is significant towards restoring financial stability and renewing faith in Nigeria's banking sector.  The move of NDIC towards the payment of N16.18 billion in liquidation dividends to depositors and other stakeholders of 20 banks that found themselves in the throes of liquidation This momentous development not only signifies a beacon of hope for affected parties but also underscores the NDIC's commitment to its mandate of safeguarding depositors' interests and maintaining the stability of the nation's banking system.

Important Concepts

Before we get this very important information about this noteworthy event from the NDIC, it's crucial to grasp the concept of liquidation dividends and other helpful tips related to the concept.

Understanding Liquidation Dividends

These dividends are payments made to depositors and creditors of banks that have been declared insolvent and subsequently placed under liquidation. Such a measure is taken when a bank's financial situation becomes unsustainable and the authorities decide that winding up the institution is the most viable course of action. Liquidation dividends serve as a means to partially reimburse depositors and stakeholders for their losses resulting from the bank's failure.

NDIC's Role in Financial Stability

The NDIC, established to ensure the safety of depositors' funds and promote confidence in the banking sector, is pivotal in maintaining financial stability in Nigeria. This recent initiative exemplifies its dedication to fulfilling this mandate. By providing relief to affected depositors and stakeholders, the NDIC mitigates the economic fallout from bank failures and sends a reassuring message to the public that their investments are protected.

Implications for Depositors

For depositors who had feared the loss of their hard-earned money due to bank liquidation, the NDIC's action brings much-needed relief. While liquidation dividends may not fully cover their losses, they serve as a lifeline, offering some financial recuperation. This gesture can help depositors regain confidence in the banking system, encouraging them to continue entrusting their funds to Nigerian banks.

Strengthening Trust in the Banking Sector

Trust is the cornerstone of any robust banking system. The NDIC's proactive approach to addressing the aftermath of bank failures strengthens trust among depositors, investors, and stakeholders. By fulfilling its duty to compensate those affected by liquidated banks, the NDIC demonstrates its commitment to upholding the integrity of Nigeria's banking sector.

Conclusion

The NDIC's commencement of N16.18 billion in liquidation dividend payments represents a commendable step towards restoring faith in Nigeria's banking industry. It serves as a reminder that the authorities are dedicated to safeguarding depositors' interests and maintaining financial stability. While the road to full economic recovery may be long, these dividend payments may provide hope and a sense of justice to those who have been affected by the unfortunate demise of their banks.  Though it is coming rather late, as the saying goes, it is better late than never. As the NDIC continues its mission to ensure the resilience and trustworthiness of the Nigerian banking system, depositors and stakeholders can find solace in knowing that their interests remain a priority.

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FAQs

What does NDIC stand for?

The Nigeria Deposit Insurance Corporation (NDIC) is an independent agency of the Federal Government of Nigeria that protects depositors of insured banks in the event of bank failure.

When was the NDIC established?

The NDIC was established in 1988 under the Nigeria Deposit Insurance Corporation Act, No. 16 of 1988.

What are the mandates of the NDIC?

The mandates of the NDIC include: Insure deposits in licenced banks and other financial institutions operating in Nigeria; Contribute to financial system stability; Promote fair and healthy competition in the banking system, and Promote public confidence in the banking system.

PromotingPromotingContributingEnsuringPromotingPromotingContributingEnsuringHow does the NDIC achieve its mandates?

The NDIC achieves its mandates by: Supervising insured institutions to ensure that they are safe and sound; Providing financial and technical assistance to failing or distressed insured institutions; Promptly paying depositors of failed insured institutions up to the insured limit; and Liquidating failed insured institutions in an orderly manner.

What are the roles of the NDIC in the Nigerian economy?

The NDIC plays an important role in the Nigerian financial system by protecting depositors and promoting financial stability. The NDIC's mandates are essential for maintaining public confidence in the banking system and encouraging economic growth.

Is the NDIC recognised by IADI?

Yes, the NDIC is a member of the International Association of Deposit Insurers (IADI), a global association of deposit insurers.

Why is NDIC paying liquidation dividends to depositors, creditors, and shareholders of 20 banks in-liquidation?

NDIC is paying liquidation dividends to depositors, creditors, and shareholders of 20 banks in liquidation because it has made significant recoveries from debtors and realised assets of the banks.

What is a liquidation dividend?

A liquidation dividend is a payment made to depositors, creditors, and shareholders of a bank that has been liquidated. It is paid out of the proceeds from the sale of the bank's assets, after all other liabilities have been paid.

How much liquidation dividend is being paid?

A total of N16.18 billion in liquidation dividends is being paid to depositors, creditors, and shareholders of the 20 banks in-liquidation.

Who is eligible to receive liquidation dividends?

Depositors, creditors, and shareholders of the 20 banks in-liquidation are eligible to receive liquidation dividends.

How can I receive my liquidation dividend?

To receive your liquidation dividend, you should contact NDIC at any of its offices nationwide or visit the claims page on the NDIC website.

What are the 20 banks in-liquidation?

The 20 banks in-liquidation are: Icon Merchant Bank Liberty Bank Progress Bank City Express Bank Premier Commercial Bank All States Trust Bank Fortune Bank Financial Merchant Bank Pan African Bank Assurance Bank Merchant Bank of Africa (MBA) Nigeria Merchant Bank Commercial Trust Bank North-South Bank Allied Bank Cooperative and Commerce Bank Prime Merchant Bank Century Bank Rims Merchant Bank Amicable Bank.

When will I receive my liquidation dividend?

NDIC has commenced the verification and payment of liquidation dividends to depositors, creditors, and shareholders of the 20 banks in-liquidation. The verification and payment process is expected to last for 30 days, starting from September 28, 2023.

What documents do I need to submit to receive my liquidation dividend?

The documents you need to submit to receive your liquidation dividend will depend on your status as a depositor, creditor, or shareholder. Please contact NDIC for more information.

What should I do if I have not received my liquidation dividend after 30 days?

If you have not received your liquidation dividend after 30 days, please contact NDIC at any of its offices nationwide or visit the claims page on the NDIC website.

Can I receive the division of dead parents?

Kindly contact the nearest NDIC office for clarification on that.