The Bridge Bank System Was To Resolve Problems Of Undercapitalization- NDIC

The application of bridge bank System according to the Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, was to resolve the issue of three under-capitalised banks which in all, was in the interest of depositors and customers of the banks.

The three affected banks include Spring Bank, Bank PHB and Afribank which had since changed to Enterprise Bank, Keystone Bank and Mainstreet Bank, respectively.

Ibrahim stated at the NDIC’s special day of the just concluded 25th Lagos international trade fair, that bridging the banks had helped to preserve and sustain daily operations of the failed banks, safeguard the banks’ total deposit liabilities of N809.4 billion and also safeguard 6,667 jobs in the affected banks, adding that it had also enhanced the confidence of both the depositors and creditors of the banks and prevented for the banks a systemic repercussions on the entire financial system.

The NDIC boss disclosed that the corporation had made a cumulative debt recovery of N22.2billion out of N179billion for the banks in liquidation between 1994 and August 2011. It also recovered N8.3million from the closed microfinance banks (MFBs).

He pointed out that the NDIC had paid an aggregate sum of N2.02billion to about 69,000 depositors of the 103 microfinance banks which had their operating licenses revoked in September last year, stating that it represented about 41 per cent of total insured amount of about N4.94billion.