Depositors Abandon Funds Trapped in Failed Banks

Nigeria Deposit Insurance Corporation (NDIC) has lamented the low level of turn out by depositors of failed banks to collect their insured deposits.

Prince Aghatise Erediauwa, executive director, Operations, NDIC, attributed the situation to the low awareness level about the NDIC and its activities, in the country.

Speaking during the 2013 workshop for finance correspondents in Uyo, Erediauwa said that public awareness was one of  NDIC’s biggest challenges.

“The major responsibility of NDIC is to ensure that depositors are promptly paid.  But for you to be paid you have to come forward. Many of the depositors do not turn up to collect their insured deposits and the money that is set aside remains there in the account at the CBN.”

“In spite of the substantial budget that is allocated for public awareness, the level of awareness about NDIC and its activities is still less than satisfactory.

We spend a lot of money advertising in the media, yet the response is still low.

According to him, unless the corporation is able to increase the percentage of insured deposits paid out to failed banks’ customers, it cannot be deemed to have performed well.

“We gauge our success as a deposit insurer on what percentage of the amount set aside has been paid out. But if people do not come out to collect their money no matter how well we perform on other functions of the corporation, we still cannot say we have performed well.”

Erediauwa said that these and other challenges informed the decision of the NDIC to rebrand. “Looking at all these challenges we felt that the role  of the NDIC has evolved over time and to bring it in line with our functions it would be necessary to rebrand the NDIC, he said.

Recall that the NDIC said it has paid a total of N6.82 billion to 528,212 insured depositors of closed banks as at June 20, 2013, compared to the N6.68 billion paid to 527,942 insured depositors of closed banks as at December 31, 2011.

This means that in 18 months, the corporation paid only N140 million as insured deposits to 270 depositors.

Erediauwa said the NDIC re-branding initiative is part of its strategic re-engineering to review the process, procedures and systems of the corporation in order to effectively discharge its mandate.