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Failed banks: NDIC worries over unclaimed deposits

By BusinessNews Staff on December 6, 2013

The Nigeria Deposit Insurance Corporation has expressed worry over the level of unclaimed deposits by customers of failed banks.

The corporation said it was currently working on modalities that would enable it to identify and reach customers of failed banks that had not claimed their deposits.

The Managing Director and Chief Executive Officer of the NDIC, Alhaji Umaru Ibrahim, gave the hint on Wednesday during a workshop on “Deposit insurance and financial inclusion.”

He said the modalities became imperative since it was clear that some depositors of the failed banks, who had little deposits, had not come out to claim their funds.

It was learnt that the unclaimed deposits, currently with the Central Bank of Nigeria, were in small balances ranging from N200 to N1,500 per customer.

It was, however, not clear how much the total balance would be.

He said, “We are concerned about the issue of unclaimed deposits and we will continue to do everything possible to encourage the depositors to come forward and have their deposits verified and paid.”

Ibrahim called on states and local governments to establish microfinance banks as a step towards assisting the financial inclusion drive of the monetary authorities.

This, he noted, would help to reduce the level of poverty at the grass roots.

Investing in MFBs at the grass roots, he said, would not only help to improve financial access to the people, it would also assist their contributions to the country’s Gross Domestic Product.

He said, “For instance, in Jigawa, even as of today, there are less than five functional MFBs even though there is a brand new airport there.

“So, we have been urging the state governments to take advantage of the MFB scheme. The Central Bank has realised that it is important for state and local governments to be given the opportunity to float, nurture and dispose of MFBs.

“This is a new policy that has been agreed upon by the CBN and it is in the realisation that MFBs cannot be left in the hands of Deposit Money Banks because the creation and sustenance of MFBs is a very serious developmental issue and the United Nations Development Programme and some other developmental organisations have amply demonstrated that.”

He explained that it would be difficult for states that did not have enough MFBs to easily access the N220bn Micro, Small Medium Enterprises Development Fund.

Ibrahim said the corporation was supporting the financial inclusion drive through guaranteeing deposits, especially of small and poor savers.

He said, “To roll out, we are developing a framework for the insuring of deposits of mobile banking, we need to provide an insurance cover, some protection for those who do Internet banking.”

[Punch]

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