From Ernest Chinwo in Calabar, 07.20.2010

The Nigeria Deposit Insurance Corporation (NDIC) has disclosed its plans to peg depositors refund from failed banks at between N200,000 and N500,000.Managing Director of NDIC, Alhaji Umaru Ibrahim gave the indications at the opening ceremony of a conference in Calabar, Monday, to fine tune the proposed amendments to the NDIC Act.

He said the depositors Insurance Scheme in Nigeria has been given added responsibility to handle the orderly winding-up of closed financial institutions, adding that it entails the realization of closed banks assets and using the proceeds to settle depositors liabilities and other creditors. According to Ibrahim, although the amendment in 2006 had addressed some of the identified weaknesses in the 1988 Act, the amendments did not foresee the developments that emerged during the 2008 global economic meltdown and the corporate governance issues that came to fore.

He said the conference would therefore look at the proposal the corporation came up with and to give the National Assembly members an opportunity to critically examine the proposals. The proposal among other things seeks to give the NDIC the powers to move into any bank that fails to pay depositors their money without waiting for any court action or interference from the bank.He disclosed that some of the amendment the proposed new law would handle include enhancement of deposit insurance coverage, corporate governance issues, tenure and conflict, conflict of interest, prompt payment of depositors funds, enforcement of powers, enhancement of the DIF and protection of the assets of the closed banks/NDIC against attachment.

According to him, the proposed amendment would address the various challenges faced by the corporation, in particular those that prevent immediate payment of insured deposit to depositors of failed banks as a result of legal/court actions usually instituted by erstwhile owners of those banks. The Chairman of the Committee on Banks and Insurance Mr Hussein Namadi said banks in the past caused depositors to suffer but with current proposal things will change for the better.

He there is need to ensure we enhance a law so that depositors should have some funds back and that is one of the reasons we are working on this act. The recommendation of what we have done would soon be submitted to the House in the next one or two weeks.

Source:ThisDay