Nigeria Deposit Insurance Corporation yesterday said that it does not collect subvention from the federal government but rather remit part of its surplus into the consolidated revenue fund. The Corporation state this in a press statement issued yesterday in response to allegations that by a former Director-General, Nigeria Stock Exchange (NSE), that the corporation collects subvention from the federal government.
The Corporation stated: “Our attention has been drawn to remarks credited to erstwhile DG, NSE, Dr. Ndidi Okereke-Onyuike, which was published in many newspapers on Thursday, 10th November, 2016. Prof. Ndi Okereke-Onyiuke Prof. Ndi Okereke-Onyiuke “In her speech delivered during a book launch in Lagos,Dr. Okereke-Onwyuike called on the Federal Government to merge the Nigeria Deposit Insurance Corporation (NDIC) with Asset Management Corporation of Nigeria (AMCON)as their mandates were similar.
She further alleged that the NDIC relied on government subvention for its operational activities but lacked the capacity and efficiency to execute its mandate. “The unfortunate remarks were a glaring indication that the Ex-DG NSE clearly lacked adequate understanding of the roles of the NDIC in the Nigerian financial system, which had been widely acknowledged over the last 27 years. “The NDIC was established in 1988 and commenced operations in 1989 to administer Deposit Insurance System (DIS) in Nigeria.
The objectives of NDIC include Protection of Depositors, particularly small savers by providing an orderly means of reimbursement in the event of failure of an insured banking institution. The core mandates of NDIC include Deposit Guarantee, Bank Supervision, Failure Resolution and Bank Liquidation. “The Corporation also conducts supervision of the insured licenced banks in collaboration with the CBN to ascertain their financial conditions for the purpose of safeguarding depositors and contributing to financial system stability in the country.
“The failure resolution mandate of the Corporation allows it to extend Technical and Financial Assistance to eligible banks, assist in Purchase and Assumption (P&A) transactions, Deposit Transfer, Merger and Acquisition (M&A), Bridge Bank as done in 2011 in collaboration with the CBN to prevent monumental banking crisis in Nigeria and outright liquidation of failed institutions. It is also worth mentioning that through the bridge bank initiative, over three (3) million depositors and 6,600 jobs were saved. “It is also on record that the Corporation in collaboration with the CBN in 2009midwifed the establishment of Asset Management Corporation of Nigeria (AMCON).
AMCON was purposely set up to purchase toxic assets from the banking institutions and engage in debt recovery of such non-performing loans. The mandate of AMCON is quite different from that of the NDIC.
The NDIC sits on the Board of AMCON and contributes its technical knowledge, expertise and experience in distress resolution. “It should be noted that contrary to Mrs. Okereke-Onyuike’s assertion, the NDIC does not enjoy any government subventions. Its income is derived from investment of insurance premium paid by the insured banks. In fact, the Corporation has been remitting billions of Naira of its annual operating surpluses to the Federal Government as required by the Fiscal Responsibility Act. “The NDIC’s mandate and scope of operations are far beyond such narrow scope as was ignorantly painted by Mrs. Okereke-Onyuike. Hence, the call for the merger of the NDIC and AMCON is misplaced and totally uncalled for.”