NDIC steps up loan recovery drive, may prosecute debtors

WITH about N7 billion bad loans yet to be recovered by some microfinance banks, the Nigeria Deposit Insurance Corporation (NDIC) has promised to intensify efforts to prosecute fraudulent bank directors, some of whom are currently being investigated.To achieve this, the NDIC Managing Director, Alhaji Umaru Ibrahim said that the corporation is partnering with the Special Fraud Unit to intensify investigations into the petitions of financial malpractices in the industry.Already, the corporation noted that it has paid over N3 billion to depositors of closed microfinance banks, while the managing directors of the liquidated 103 banks would be prosecuted, as soon as investigations are concluded.Ibrahim explained that the corporation sought the assistance of the Special Fraud Unit in order to intensify its loan recovery exercise and consequent prosecution of erring managing directors of affected microfinance banks.According to him, 'we are hoping to step up the process of investigation and prosecution. We need to ensure that our facts and figures are accurate in order to enhance prosecution. In collaboration with the Central Bank of Nigeria, CBN, target examinations were conducted on all MfBs in the system in February 2010, and these revealed the grave condition of many MfBs, which eventually led to the revocation of operating licenses of 103 MfBs.'Although, we have appointed some debt collection agents to enhance the pace of debt recovery, we also need to intensify this effort.''Efforts are being made to prosecute the people that ran the banks aground while the Nigerian Police are preparing documents that will facilitate the banks' chiefs' appearance in court soon. We are arranging with the Police to prosecute MfB owners that are battling with insolvency,' he added.On the payment process of depositors' funds, Ibrahim explained that the process is ongoing, noting that only verified claims have been granted while other people with genuine claims will also be paid as soon as their claims have been verified.On his part, the Commissioner of Police, Special Fraud Unit, Lagos, Ayotunde Ogunsakin noted that the unit wouldintensify its efforts at working with the corporation to ensure that public confidence in the financial sector is renewed.'With added encouragement and necessary logistics and wherewithal, the unit shall vigorously pursue the assignment in regards to the recovery of un-serviced loans, investigation of banks' fraud cases, and insider abuse. We can certainly reduce the impact of losses arising particularly from financial issues if we can intervene earlier,' he added.
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