Liquidated banks: NDIC set to recover N400b loans

Recovering loans from liquidated banks in Nigeria has been an arduous task for both borrowers and the government. The liquidation process of a bank is a challenging and complex procedure that often results from mismanagement, fraud, or insolvency. When a bank undergoes liquidation, the recovery of loans becomes a crucial priority to protect the interests of depositors, creditors, and the overall financial system. However, the process of recovering loans from liquidated banks in Nigeria has been hindered by numerous obstacles, including limited assets, legal complexities, and cumbersome bureaucratic procedures.

One of the primary challenges in recovering loans from liquidated banks in Nigeria is the limited assets available for distribution to creditors and borrowers. When a bank goes into liquidation, it usually lacks sufficient funds to repay all its debts fully. As a result, recovering loans becomes a daunting task, as the available assets are divided among various stakeholders, including depositors, shareholders, and other creditors. This limited pool of resources often leaves borrowers with very little chance of reclaiming their loans in full.

Read Also : Dangote Refinery Needs Government’s Help Not Hindrance -Rewane

More than N400 billion is anticipated to be recovered by the Nigeria Deposit Insurance Corporation (NDIC) from loans made by liquidated deposit money banks. Bello Hassan, Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), stated that the organization is utilizing the court system and anti-graft agencies to expedite the recovery process because the liquidated banks’ depositors’ payments are non-negotiable.

Bello spoke while declaring open the 20th edition of the NDIC Finance Correspondents Association of Nigeria (FICAN) Workshop where he noted that NDIC has paid over N1.6 billion to over 40,000 depositors of the recently liquidated banks.

“A lot of customers of banks in liquidation that borrowed are not willing to repay those debts. “I want to put it on record that those debts, although those loans that were granted were granted out of deposits of people that were collected in the banks, so it is only when those debtors pay back that NDIC will now be able to pay the depositors of those failed banks. That is one of the greatest challenges we are facing.

“The value of the debt we are about to recover if you take into account all the banks in liquidation, that is the DMBs, microfinance banks, the primary mortgage institution, this is a debt that is well beyond N400b and that is what we are expecting to recover so we can pay the depositors of those banks in liquidation,” Bello said.

“Already we have made substantial recovery and we have made some payments and that is why in the recent past, we have put our adverts that depositors of those failed banks should come forward so we can verify them in other to pay what we call liquidation dividends.

According to Bello, the court’s and the anti-graft agencies’ cooperation is essential to the corporation’s recovery. Bello stated, “Our request to the government is for the government to assist us in making sure that we expedite the litigation process,” referring to the fact that lawsuits frequently cause the corporation to take longer to resolve cases than expected.

Subscribe to Notifications