DEAD BANKS AND LIVING DEPOSIT

If you are a depositor in any of the 48 banks that collapsed between 1994 and 2006, and you have not collected your money, you can still recover some or all your money. You can recover the part of your money covered by the insurance provided by Nigeria Deposit Insurance Corporation (NDIC).

That portion of bank deposits insured by the Corporation is called ‘maximum insured deposit’. It used to be N50,000, and later N100,000. Now it is N500,000 for banks and N200,000 for microfinance banks and mortgage banks. So depending on the ‘maximum insurance deposit’ as at the time your bank was closed, you can still recover part of your deposit in the dead bank. There is also the possibility of recovering the remaining portion of your deposit not covered by the NDIC insurance cover. This definitely sounds strange. But the truth is that it is possible and some people and organisations have actually recovered all their deposits in dead banks.

When a bank is closed by the Central Bank of Nigeria (CBN), and NDIC commences the liquidation of the bank. The Corporation first pays depositors the maximum insured deposit. Thereafter, it sells the assets of the closed bank, and uses the proceeds of the sales to pay for deposits above the maximum insured deposit. For example, if you had N1 million in a dead bank, and N500,000 is the maximum insured deposit.

NDIC will pay you N500,000 as soon as the bank closes shop. The remaining N500,000 will be paid from the money the Corporation received from selling the assets of the bank. This is called liquidation dividend. According to the Corporation, it had declared N1.5 billion as liquidation dividend for eight banks-in-liquidation as at December 31st 2010. But out of this, it has only be been able to pay N848.127 million. This leaves a balance of over N600 million yet to be collected as liquidation dividend by depositors of these eight banks. Your money that you believe is gone or lost might be among this N1.5 bi
llion. You never can tell.

Now, if you have money in any of the 48 closed banks, the million dollar question on your mind would be, ‘how do I recover my money from this NDIC? It is very simple.

The first thing is to either visit the Corporation’s office, or its website for information. Most importantly, you will be required to complete relevant forms for deposit insurance claims. You will also be required to provide as evidence of ownership of account in the closed bank, accounts documents such as unused cheque books, old cheque stubs, passbooks, fixed deposit certificates etc.

You will also have to identify yourself with a valid identification document such as National ID card, driver’s licence or international passport. After verification of the ownership of the account and account balance, the depositor would be duly paid the insured deposit or liquidation dividend by cheque or deposit transfer through an agent bank or acquiring bank.

CULLED FROM VANGUARD