NDIC Targets ₦1.5tn Debt Recovery from 150 Liquidated Banks

The Nigeria Deposit Insurance Corporation (NDIC) has intensified efforts to recover an estimated N1.5 trillion in outstanding debts and assets trapped in failed financial institutions by strengthening the capacity of debt recovery agents and deploying new legal tools under the NDIC Act 2023 to fast-track recoveries from about 150 banks currently in liquidation.

The move is part of a broader strategy by the Corporation to improve depositor’s reimbursement, enhance accountability within the banking system, and reinforce public confidence in Nigeria’s financial sector.

This revelation emerged yesterday at a sensitisation seminar organised by the NDIC legal and asset management departments for debt recovery agents and key stakeholders.

Director of the Legal Department, Kushimo Olufemi and Director of Asset Management, Patricia Okosun reiterated the Corporation’s commitment to improving performance and achieving measurable results.

Okosun who spoke with newsmen at the seminar said the newly enacted law provides stronger enforcement powers and expanded mechanisms that will significantly improve asset tracing, debt collection, and legal action against debtors and culpable insiders.

According to the Corporation, the engagement was designed to equip recovery agents with a clearer understanding of the additional powers now available to them and how to deploy those tools more effectively.

“The objective of this seminar is simple. The NDIC Act has strengthened debt recovery. We now have more robust provisions than what existed previously. Today, we are sensitising our recovery agents on these new tools and how they can apply them to improve recoveries.”

Mounting debt portfolio

According to reports, the N1.5 trillion recovery target represents unpaid loans, insider-related credits, non-performing assets, and other outstanding obligations tied to deposit money banks (DMBs), microfinance banks (MFBs), primary mortgage institutions and finance companies that have collapsed over the years.

At least no fewer than 50 DMBs and over 100 MFBs in liquidation are still holding the huge sum with the NDIC vowing not to rest on its oars in recovering the funds.

Okosun explained that while not all recoveries are handled directly by external agents, their role remains critical to accelerating collections, especially in cases involving complex litigation, scattered assets, or reluctant debtors.

“But all recoveries will not come from debt recovery agents alone,” she clarified, adding, “However, they remain a key part of the process. With better tools and legal backing, we expect stronger outcomes.”

She expressed confidence that the enhanced framework will enable it to reclaim a significant portion of the outstanding debts, even though full recovery may take time.

According to her, the corporation is optimistic in recovering the debt. “We are optimistic. If we weren’t optimistic, we wouldn’t be here. We want to recover everything that is legally recoverable. That is why we are strengthening the capacity of those responsible for the job.”

New legal muscle under NDIC Act 2023

Central to the renewed push is the NDIC Act 2023, which replaces earlier legislation and expands the Corporation’s authority in liquidation, enforcement, and asset recovery matters.

Under the new law, the NDIC has broader powers to trace assets, pursue delinquent debtors, take legal action against directors and officers whose actions contributed to bank failures, and collaborate with law enforcement agencies to enforce compliance.

She said pressure continues to mount on the corporation to ensure the recovery of the outstanding debt being owed by banks in liquidation.

“Of course, there is pressure,” she admitted, adding, “Anyone who has money trapped in a failed bank wants to be paid, and rightly so. We also want to pay them. That is one of the key reasons we are intensifying recovery efforts.”

She noted that earlier recoveries translate directly into faster reimbursements.

“The earlier we recover, the better. That allows us to settle depositors and other claimants sooner,” the official said.

She also cautioned that legal disputes and court processes can slow down timelines.

“Because of litigation and other legal issues, it is difficult to give a specific deadline. No one can say exactly whether recoveries will take one month, two months, or longer. But we are working to accelerate the process as much as possible.”

The recovery initiative is also unfolding at a time when Nigeria’s banking sector is undergoing significant reforms, including recapitalisation exercises, mergers and consolidations aimed at strengthening financial institutions.

She however expressed hope that most institutions will weather the changes successfully.

“We hope every bank scales through,” the official said, adding, “Nobody wishes for any bank to fail. Our goal is stability. But where failures occur, we are prepared to step in and protect depositors.”

The Director of Legal Department said the Act is a “comprehensive bouquet of tools” that significantly enhances the Corporation’s operational reach.

“The NDIC Act 2023 gives us stronger legal backing,” he said, adding, “We intend to use every section, every provision, every phrase, and every comma of the Act to ensure effective debt recovery.”

Beyond the financial aspect, the Corporation stressed that accountability is a key objective of the new regime.

“It’s not only about recovering money. It is also about deterrence. We must sanitise the banking system and ensure that those responsible for the failure of banks are brought to book,” he said.

A partner at Olaniwun Ajayi LP, Mitchell Aghatise in a presentation said the N1.5 trillion outstanding is a huge amount of money, adding that all efforts must be intensified to recover the fund.

He said, “And you may then ask, well, how much are we missing? I mean, the Director mentioned when we were speaking that there’s about N1.5 trillion out there. If anybody has looked at our national budget together, this is a lot of money. And imagine what that would do in terms of just economic generation, in terms of transactions. So you need to see that, the work here, I would say is very important.

“The work here goes beyond NDIC. The work here actually touches on the lifeblood of our economy. So this debt recovery has been essential to all of your obligation. Why? As I mentioned, once a bank’s licence is revoked, it is said to have failed, right? But at that point when the banking license is revoked, it does not mean that, that entity is dead, right? The entity still exists.”

Meanwhile, the NDIC has stated that about 99 per cent of Nigerian bank depositors are now fully protected following the upward review of its deposit insurance coverage limits.

Managing Director/Chief Executive of NDIC, Mr. Thompson Oludare Sunday, disclosed this on Wednesday at the Corporation’s Special Day during the 47th Kaduna International Trade Fair.

Represented by the Assistant Director, Communications and Public Affairs, Dr. Regina Timlong, Sunday said the enhanced coverage, introduced in 2024, was designed to strengthen financial stability and ensure that the vast majority of depositors are fully safeguarded in the event of bank failure.

Under the revised framework, depositors in Deposit Money Banks, Mobile Money Operators and Non-Interest Banks are insured up to N5 million, while those in Payment Service Banks, Microfinance Banks and Primary Mortgage Banks enjoy coverage of up to N2 million.

He said the increase in insurance limits has significantly boosted public confidence in the banking system, deepened financial inclusion and reinforced the country’s financial safety net.

According to him, NDIC’s mandate extends beyond deposit guarantees to include bank supervision, distress resolution and liquidation of failed banks in collaboration with the Central Bank of Nigeria (CBN).

He noted that the Corporation has intensified risk-based supervision and strengthened resolution planning to minimise systemic disruptions and better protect depositors’ funds.

The NDIC boss cited the recent payment of insured deposits to customers of the defunct Heritage Bank Limited, Union Homes Plc and Aso Savings and Loans Plc as evidence of improved payout efficiency.

He explained that the Corporation leveraged the Bank Verification Number (BVN) system to trace depositors’ alternate accounts and process payments within days of the banks’ closure.

Sunday urged depositors to ensure proper linkage of their BVNs to their accounts to enable seamless access to insured funds whenever necessary.

In his remarks, President of the Kaduna Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA), Alhaji Faruk Suleiman, described NDIC as a critical pillar of Nigeria’s financial safety architecture.

He said financial system stability remains crucial for businesses, influencing investment decisions, access to credit, payroll obligations and long-term planning.

Suleiman called for closer collaboration between NDIC and the organised private sector to extend awareness of deposit insurance to micro, small and medium enterprises (MSMEs), traders, farmers and informal sector operators who engage with microfinance banks and fintech platforms but may be unaware of available financial protection mechanisms.