NDIC Blames Failed Bank Debtors for Delays in Loan Recovery, Depositor Payments

By Adedapo Adesanya

The Nigeria Deposit Insurance Corporation (NDIC) has blamed the refusal of some debtors of failed banks to repay outstanding loans for delays in recovering assets and settling depositors’ claims.

The corporation said some borrowers were frustrating recovery efforts through asset concealment, court delays and intimidation, undermining its efforts to recover funds belonging to depositors of liquidated financial institutions.

The Director of the Asset Management Department of the NDIC, Mr Ogungbemi Theophilus, disclosed this on Monday at the Stakeholders’ Seminar and Public Relations Workshop in Abuja.

He said some debtors wrongly assumed that the revocation of a bank’s operating licence relieved them of their obligation to repay outstanding loans.

“Some debtors of failed banks believe that because a bank’s licence is revoked, they are not obliged to fulfil their responsibilities anymore. They hide assets. They frustrate service. Employ delay tactics in court. Sometimes, they try to intimidate. But we have to always do our job and professionally too,” he said.

Mr Theophilus described loan recovery as one of the most difficult aspects of bank liquidation, noting that outstanding debts often become harder to recover after financial institutions cease operations.

“A loan that was not repaid when the bank was alive does not become easier to recover when the bank is dead,” he said.

He warned that prolonged recovery processes could reduce the value of physical assets and delay payments to depositors, explaining that unoccupied buildings depreciate, equipment deteriorates, and outstanding loans become increasingly difficult to recover.

“Every delay slows payment to depositors,” he added.

The director explained that the Asset Management Department was responsible for managing loans, physical assets and investments belonging to closed deposit money banks, primary mortgage banks and microfinance banks.

He said the department was mandated to recover outstanding loans, dispose of properties and investments, and convert recovered assets into cash for distribution to uninsured depositors.

According to him, depositors of deposit money banks, non-interest banks and mobile money operators are insured up to N5 million per depositor per bank, while customers of microfinance banks, primary mortgage banks and payment service banks are covered up to N2 million.

He said the existing insurance coverage fully protected approximately 99 per cent of depositors, while customers with balances above the insured limits depended on liquidation dividends to recover their outstanding funds.

“For them, the insured payment is only the first instalment. The balance, the uninsured deposit, can only be paid as a liquidation dividend, from the proceeds of the assets we are able to realise and the loans we are able to recover,” he explained.

Mr Theophilus disclosed that the corporation conducted public auctions on November 3 and 4, 2026, to dispose of physical assets belonging to Union Homes Savings and Loans, Heritage Bank and Resort Savings and Loans.

He said the auctions, conducted through competitive sealed bidding, took place in Lagos, Taraba and Adamawa states under the supervision of the Asset Management Department and appointed auctioneers.

The director also cautioned against excessive recovery costs, stressing that expenses incurred in recovering debts must not exceed the value of the assets recovered.

“If it costs us N10 million to recover N8 million, the depositor has lost. We must be disciplined about costs, timelines and reporting,” he said.

He warned professionals involved in asset recovery against insider dealing, deliberate undervaluation, collusion with buyers and diversion of proceeds, adding that the corporation would not tolerate practices that short-change depositors.

Mr Theophilus further announced that the NDIC was developing a comprehensive Asset Management Policy to strengthen asset identification, documentation, valuation and disposal procedures.

He said the corporation would also deepen collaboration with auctioneers, valuers, sales agents, surveyors and other professionals to improve loan recovery and accelerate the settlement of depositors’ claims.