By Chioma Obinagwam
The Nigeria Deposit Insurance Corporation(NDIC) has refuted assertions made by the former Director General(DG) of the Nigerian Stock Exchange(NSE), Ndidi Okereke-Onyuike that the NDIC relies on government’s subventions for its operational activities.
The Corporation disclosed this in a statement issued on its website.
In a statement issued on its website, NDIC rescinded: “It should be noted that contrary to Mrs. Okereke-Onyuike’s assertion, the NDIC does not enjoy any government subventions.”
The NDIC, however noted that its income is derived from investment of insurance premium paid by the insured banks.
“In fact, the Corporation has been remitting billions of Naira of its annual operating surpluses to the Federal Government as required by the Fiscal Responsibility Act,” the corporation said.
Okereke-Onyuike also called on the Federal Government to merge the NDIC with the Asset Management Corporation of Nigeria (AMCON), that their mandates were similar and that the NDIC lacked the capacity and efficiency to execute its mandate.
Reacting, the corporation said: “Our attention has been drawn to remarks credited to erstwhile DG, NSE, Dr. Ndidi Okereke-Onyuike, which was published in many newspapers on Thursday, 10th November, 2016.”
“In her speech delivered during a book launch in Lagos, Dr. Okereke-Onyuike called on the Federal Government to merge the Nigeria Deposit Insurance Corporation (NDIC) with Asset Management Corporation of Nigeria (AMCON) as their mandates were similar,” it continued.
The unfortunate remarks, the NDIC noted, were a glaring indication that the Ex-DG NSE clearly lacked adequate understanding of the roles of the NDIC in the Nigerian financial system, which had been widely acknowledged over the last 27 years.
The statement indicated that the NDIC was established in 1988 and commenced operations in 1989 to administer Deposit Insurance System (DIS) in Nigeria.
It further revealed that the objectives of NDIC include Protection of Depositors, particularly small savers by providing an orderly means of reimbursement in the event of failure of an insured banking institution.
“The core mandates of NDIC include Deposit Guarantee, Bank Supervision, Failure Resolution and Bank Liquidation,” it enumerated.
“The Corporation also conducts supervision of the insured licensed banks in collaboration with the CBN to ascertain their financial conditions for the purpose of safeguarding depositors and contributing to financial system stability in the country,” it stated.
The failure resolution mandate of the Corporation, it disclosed, allows it to extend Technical and Financial Assistance to eligible banks, assist in Purchase and Assumption (P&A) transactions, Deposit Transfer, Merger and Acquisition (M&A), Bridge Bank as done in 2011 in collaboration with the CBN to prevent monumental banking crisis in Nigeria and outright liquidation of failed institutions.
NDIC said: “It is also worth mentioning that through the bridge bank initiative, over three million depositors and 6,600 jobs were saved.”
It stated that the Corporation in collaboration with the CBN in 2009 midwifed the establishment of Asset Management Corporation of Nigeria (AMCON).
AMCON, it noted, was purposely set up to purchase toxic assets from the banking institutions and engage in debt recovery of such non-performing loans.
“The mandate of AMCON is quite different from that of the NDIC. The NDIC sits on the Board of AMCON and contributes its technical knowledge, expertise and experience in distress resolution,” it said.
“The NDIC’s mandate and scope of operations are far beyond such narrow scope as was ignorantly painted by Mrs. Okereke-Onyuike. Hence, the call for the merger of the NDIC and AMCON is misplaced and totally uncalled for,” it added.