NDIC Warns Nigerians against Illegal Fund Managers

James Emejo in Abuja

The Managing Director/Chief Executive, Nigeria Deposit Insurance Corporation (NDIC), Mr. Bello Hassan, yesterday cautioned the public against patronising illegal fund managers, often referred to as wonder banks or Ponzi schemes.

He pointed out that the entities offer high interest rates and profits that are too good to be true, leading to devastating losses for many.
Hassan, reiterated the warning while addressing participants at the NDIC’s Special Day at the ongoing 18th Abuja International Trade Fair.
He said the illegal fund managers were neither licenced by the Central Bank of Nigeria (CBN) nor covered by the NDIC deposit insurance scheme.

Represented by the NDIC Director, Communication and Public Affairs, Mr. Bashir Nuhu, Hassan advised the public to, “patronise only banking institutions with a display of the NDIC stickers carrying the words, ‘Insured by NDIC’ in their banking halls or entrances and various branches across the country.”
He also restated the corporation’s contributions towards ensuring the stability of the financial system by effectively complimenting the CBN in supervising the banking sector and safeguarding depositors’ funds from the adverse effects of bank failures when they occur.

The NDIC boss said Nigerian depositors remained a top priority for the organisation adding that, “our foundation is built on ensuring the safety and security of their deposits. This ideal is encapsulated in our strapline; ‘Protecting your bank deposits’.
“This is crucial for financial inclusion because it gives Nigerians the assurance that their money is safe and accessible when needed. Furthermore, the corporation’s activities through the supervision of banks, continuous monitoring, and oversight serve as consumer protection for depositors which enhances confidence in the financial system.”

This, he said, acts as an incentive for the unbanked to access the financial services of licensed banks.
He further reiterated the NDIC’s key mandate to provide deposit guarantees to depositors of insured financial institutions, bank supervision, distress resolution, and bank liquidation.

He said over the years, the corporation had grown stronger in fulfilling these responsibilities and has significantly enhanced its public policy objectives of establishing a robust deposit insurance scheme in the country.

Hassan, stressed that following the recent revocation of licences of 179 microfinance banks and four Primary Mortgage Banks by the CBN, the NDIC immediately commenced liquidation of the banks and began disbursing insured sums to depositors within just seven days of the closure of these banks.
He noted that as of September 22, 2023, the corporation had paid a cumulative insured sum of N1.084 billion to 29,573 depositors of the closed MFBs/MPBs.
He explained that payments were still ongoing and depositors with funds exceeding the insured limit would receive liquidation dividends after the recovery of debts and sale of physical assets of the closed banks.

According to him, “Currently, the corporation is in the process of verifying and paying liquidation dividends to depositors and stakeholders of 20 closed banks.

“They are Allied Bank, Peak Merchant Bank, Commerce Bank, Continental Merchant Bank, Financial Merchant Bank, Fortune Bank, Gulf Bank, Hallmark Bank, Icon Merchant Bank, Liberty Bank, Nigeria Merchant Bank, North-South Bank, Premier Commercial Bank, Prime Merchant Bank, Progress Bank and Merchant Bank.”