Address Corporate Governance Issues, High Non-Performing Loans In Banks, FG Tells NDIC Board

The Federal Government has called on the newly constituted board of the Nigerian Deposit Insurance Corporation to come up with innovative measures that would assist in addressing the issues of poor corporate governance and high non-performing loan portfolios in banks.

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed gave the charge on Thursday in Abuja during the inauguration of the board of directors of the NDIC.

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She said the event is of great importance to the NDIC and its stakeholders considering the critical role of the Board in a strategic institution like the Corporation.

Ahmed congratulated the chairman and members of the NDIC Board on their appointment by President Mohammed Buhari and stated that a lot is being expected from them in terms of contributions to the stability of the Nigeria Financial System.

She said, “You are assuming duty at a time when the Nigerian Financial System is still facing some challenges and requires efforts aimed at addressing issues such as corporate governance, high level of non-performing loans and slide in revenue generation.

“The potential benefits and risks associated with the Financial Technology (Fintech) and block chain technology are also on the front burner.

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“These and other challenges can cause threats to the stability of our financial system and must be addressed promptly for the sector to play its role in facilitating the implementation of the National Development Plan 2021 to 2025.

“Your appointment cuts across representatives from the six-geopolitical zones of the country making a fair and equitable representation on the Board of the NDIC.

“Therefore, I have no doubt in my mind that with the caliber of personalities appointed on the Board, these challenges would be addressed head-long.

“I therefore charge you to design policies and programmes with the Management team to enable the Corporation deliver on its mandate.”

She told the board members that the mandate of the Corporation is to provide financial guarantee to depositors of insured banks in the event of failure, supervision of insured banks, distress resolution and liquidation of failed banks.

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According to the Minister, the Corporation is the only agency of government responsible for administering Deposit Insurance Scheme (DIS) in Nigeria and provides financial guarantee to depositors of all deposit taking financial institutions thereby promoting public confidence in the banking system.

“The scheme is designed to provide a further layer of protection to depositors’ in partnership with the Central Bank of Nigeria (CBN) in order to ensure safe and sound banking practices in Nigeria.

“The NDIC had since its establishment over three decades ago, remained committed to ensuring its aforementioned mandate.

“The Corporation over the years has performed creditably well and its performance in this regard provides details of bank resolutions undertaken, Merger and Acquisitions and reimbursement to depositors, amongst others.

“This showcases its importance as a component of the Nation’s financial safety and at the forefront of activities that promote financial system stability through the provision of deposit Insurance coverage to depositors of licensed banks.
“Furthermore, the Corporation has been consistent in remitting its 80 per cent operating surplus to the Consolidated Revenue Fund (CRF) of the government among many other milestones achieved,” Ahmed added.

She told the gathering that the responsibilities and role of the Board of Directors in an organization are very clear.

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The minister assured NDIC of the ministry’s continuous support in the discharge of its responsibilities.

Responding, the NDIC Chairman Abdulhakeem Mobolaji Abdulateef said the board will work towards addressing the challenges highlighted by the minister.

He said, “We will try our best to work very closely with the management that is performing. And we will as board members stay on our lane.

“I assure you because one of the most disturbing things is when people don’t know their role and they want to over reach, because we have so much to do that, we do not need to do anybody’s job.

“We assure you that we understand the mandate of this Corporation which is deposit guarantee, bank supervision, distress resolution as well as bank liquidation.

“We pray to do our best in line with the interest of the incoming administration to take it from where you have stopped.”

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