NDIC warns against diversion of funds recovered from failed banks

The Nigeria Deposit Insurance Corporation (NDIC) has warned stakeholders involved in recovering assets of failed banks against diverting funds realised from the process, saying it has zero tolerance for financial misconduct.

Mr Oluyinka Ogungbemi, Director of the NDIC Asset Management Department, gave the warning on Monday at a stakeholders’ seminar and public relations workshop organised by the department in Abuja.

Ogungbemi said the corporation’s staff did not have access to funds generated from the recovery or sale of failed banks’ assets, stressing that the process must be handled with transparency and professional discipline.

He described asset realisation as the most difficult part of bank liquidation, identifying loan recovery as the toughest aspect because borrowers who defaulted while a bank was operating may be even less willing or able to repay after its closure.

Ogungbemi said delays in pursuing outstanding loans could make recovery more difficult and reduce the value of assets.

“A loan that is not paid when the bank was in existence will not be easy when the bank is closed.

“We are expected to recover assets timely as delay erodes value because a loan not pursued becomes difficult to recover,” he said.

He said the workshop was organised to improve loan and asset recovery, strengthen relationships with stakeholders and build public confidence in the liquidation process.

“This seminar is not a routine gathering, it is a deliberate one.” – Oluyinka Ogungbemi, Director, Asset Management Department, NDIC.

“It is part of the strategic initiative of the asset management department to improve asset realisation, and the first thing we aim to do is strengthen our relationship with you (stakeholders),” he said.

Ogungbemi urged stakeholders to maintain professional conduct in carrying out their responsibilities and ensure that funds recovered from failed banks’ assets were properly accounted for.

He said closer cooperation between the NDIC and stakeholders was necessary to improve the recovery process and protect public confidence.

Recovering money owed to failed banks is a major challenge in the liquidation process, particularly when borrowers delay repayment. The NDIC says timely action, professional conduct and proper oversight of recovered funds are essential to preserving asset values and ensuring that money realised from failed banks is not diverted.

Save my name, email, and website in this browser for the next time I comment.

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.