PAULETTE ORJIME, Abuja
The recent Banking Excellence award won by the Nigerian Deposit Insurance Corporation (NDIC) has continued to attract commendations from industry watchers following the effective roles played over the years to ensure payment of insured depositors of Nigerian Banks.
The recent award was in addition to the numerous awards won by the corporation in the past.
Daily Champion recalled that NDIC in 2014 won the International Association of Deposit Insurers (IADI) award as the Best Deposit Insurance Organization of the Year under Category 2 of the IADI Core Principles on Compliance and International Collaboration. In 2016, the MD/CE was also re-elected unopposed into the Executive Committee of the IADI for three years in view of his outstanding performance in his first term (2013-2016).
Meanwhile, with the recent Banking Excellence award conferred on the Corporation by the Special Recognition and Commendation Award for Excellence in Banking (Public Service) at the Business Day Banking Awards 2017, industry watchers maintained that it was well deserved following the recorded successes in ensuring that depositors of liquidated banks are paid.
In a letter of commendation to the Corporation, the Awards Committee anchored by Business Day Research and Intelligence Unit (BRIU) stated that the NDIC was adjudged as “an outstanding public service provider” with sterling performance which stood high above its peers in effective leadership and accomplishments.
According to the organizers, the Award Committee which was made up of eminent Nigerians, reviewed the pragmatic and tangible transformations which the Corporation brought into management and execution of its core mandate including mitigation of corruption, insider abuse as well as containing non-performing loans in the nation’s financial system.
The Committee stated that the NDIC “has also pursued the observance of corporate governance principles in the Nigeria’s financial system”, with declaration that this contribution and other milestone achievements earned the Corporation the public recognition.
While commending the Corporation on the feat, the organizers stated that the NDIC had implemented good institutional transformation policies which had resulted in friendly business environment, expansion of opportunities and a huge contribution towards economic development.
Receiving the award on behalf of the Corporation, NDIC Managing Director & Chief Executive, Alhaji Umaru Ibrahim, said the Corporation welcomed the award as a challenge to further raise the bar of excellent performance on the discharge of its mandate. He recalled the rebranding of the Corporation in 2013 which gave rise to the overhaul of its processes, procedures, systems and methods of operation in line with global best practices in deposit insurance. He expressed delight that Management’s initiatives were paying off with recognitions coming from home and abroad
Commending the corporation on the myriad of achievements, the organizers expressed delight that the NDIC had implemented great institutional transformation policies which had brought about friendly business environment.
Responding to the gesture, the NDIC MD/CEO, Ibrahim, who received the award on behalf of the corporation, said the award would further spur the corporation to raise the bar of excellent performance on the discharge of its statutory duties.
The MD and acknowledged that the rebranding of the corporation in 2013 inspired the overhaul of the process, procedures, systems and method of operation in line with global best practices in the field of deposit insurance. He stressed that management’s initiatives were paying off with recognition’s coming from home and abroad.
Having been known with achieving uncommon feats, the NDIC boss in 2016, was re-elected unopposed into the IADI executive committee for another three years due to his good performance in the first term (2013 to 2016).
These sterling awards are no doubt resultant from effective performance of duty and service delivery such as prompt claims settlement as demonstrated in the case of 103 Micro finance Banks (MFBs) closed in 2010, creation of level playing ground for all operations in the banking system by extending deposit insurance coverage to micro finance banks, primary mortgage institutions and non-interest when the risk is imminent.
As part of efforts towards innovation that prompted the recent reforms initiated by the government, deposit insurance services by the NDIC extended to micro finance institutions (MFIs) all over the country in 2008.
A mechanism has been provided by Deposit insurance whereby, in the event that an insured financial institution liquidates, the depositors have no cause for alarm. The NDIC’s decision to extend insurance coverage to MFIs is aimed at increasing the interest of investors into the sector by strengthening the financial safety net. This move was formally impossible due to legal and bureaucratic bottlenecks that attended the insurance of misarranging from differing regulatory and supervisory standards between these micro finance banks and other financial institutions.
But following the passage of a bill in 2006, the NDIC has been empowered to extend its services to these MFIs. Similarly, the NDIC does not just supervise the MfBs, it also checks the distress syndrome in the banking industry by providing financial assistance to the MfBs.
Public awareness initiatives have, one time or the other, been carried out by the NDIC through the development of new robust and interactive relationship with the banking public. This is evident in the survey of the effectiveness of public awareness activities of the corporation to determine gap, the promotion of incentives for risk management by adopting Differential Premium Assessment System (DPAS) which was established in 2008.Worthy of appreciation too is the fact that NDIC adopted the bridge bank approach in August 2011, winch helped to douse palpable tension arising from depositors’ complaints.
Increasing deposit insurance coverage, the NDIC insurance levels rose from N200, 000 and N100,000 to N500,000 and N200,000 for deposit money banks and micro finance banks/primary mortgage institutions, respectively. The new insurance coverage policy was then used to offset money owed depositors of micro finance banks closed in the year 2010.
Another giant stride by the NDIC is its move to jointly address public concerns regarding the node of operations of the illegal fund managers and wonder banks, carrying out consumer protection and education through various publication platforms. The very recent publication platform is the booklet on basic banking knowledge for junior secondary school students in Nigeria.
The corporation has periodically articulated and implemented important reform programs for the purpose of achieving stability in the banking industry and of course, the overall financial system.
Being an independent agency of government, the NDIC was established by Decree 12 of 1988 which was abrogated and replaced by the NDIC Act 16 of 2006.The chief aim of this establishment was to ensure financial safety, minimize risk with broad mandates of deposit guarantee, bank liquidation, banking supervision and failure resolution.
The NDIC’s vision is to attain a leading role in deposit insurance globally. Its mission is to protect depositors’ funds and bring about stability in the financial system through effective supervision of the institutions under insurance coverage, provision of financial and technical assistance to insured institutions that are eligible, orderly resolution of failed financial institutions and prompt payment of guaranteed sum.
According to the NDIC boss, sound corporate governance practice has remained the watchword of the corporation since inception for the purpose of effectiveness in service delivery and in order to achieve the vision, the very essence of its existence. He added that the need to enthrone sound corporate governance practice in the corporation has called for the adoption of several initiatives, including the adoption of a charter and a code of corporate governance for its boards, which are founded on sound governance structures ,enhanced relations, protection of stakeholders ‘rights, internal audit and business sustainability.
It is a practice in NDIC to fully adhere to the code of corporate governance as required of all regulators under the auspices of Financial Services Regulation Coordination Committee (FSRCC).In effect, a code of conduct has also been put in place for Bank Examiners to ensure that they conduct their affairs in a manner that would promote the integrity, image and reputation of the corporation. NDIC is to carry out its obligations in line with the provisions of relevant Acts of the Federal Government of Nigeria with regards to information dissemination to the stakeholders concerned.
The relevant stakeholders also have access to information regarding the publication of statements of accounts and Annual Report made available to them by the board of NDIC. The structures, functions and operations of the corporation are made available to certain stakeholders including the CBN, public accounts committee of the Senate and House of Representatives, Federal Ministry of Finance as well as the banking public for onward assessment and verification. This is to conform to global best practices.
The NDIC boss has assured everyone that his organization will not rest on its oars in providing quality service to Nigerian banks which includes consolidating bank deposits to avoid liquidation. As far as service regulation in the banking sector is concerned, the Excellence in Banking Service Award is an honour well deserved as the NDIC has left no stone unturned in meeting up with its mandate.
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