Discharged bankers under the aegis of the Association of Ex-Staff of Non-Consolidated Banks Of Nigeria have given the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) an ultimatum to pay their N5.7billion benefits.
The Chairman of the association, Magnus Maduka, issued the ultimatum on behalf of the members on Friday during an interview on Channels Television’s Sunrise Daily, about two weeks after they won in court.
“The judge said he gave them (CBN and NDIC) three months to pay up, failing which the delay will begin to attract 10 per cent interest on the sum,” he said.
A National Industrial Court in Lagos had on May 23 ordered the Federal Government agencies to pay over N5.7bn terminal benefits to more than 1,000 bank workers affected by the re-capitalisation exercise of 2006.
The money, according to Justice Paul Bassi, is to be paid within three months from the date of judgment failing which would attract 10 per cent interest until liquidated.
About two weeks after the court judgement, the former bankers issued a month’s ultimatum for the CBN and the NDIC for payment of the said benefits to them.
“We gave them one month anyway because we can’t be on this forever,” Maduka added. “If central bank and the NDIC want to save themselves unnecessary problems, they should just grant every staff of those banks, including those that joined last week before the shutdown of the banks their terminal benefits.”
When asked if both agencies had contacted the former bankers on the implementation of the court judgement, Maduka replied in the negative.
He, however, stated that the CBN and the NDIC were aware of the order as they had their lawyers in court on the day the verdict was passed.
According to him, the N5.7 billion benefits would cover the 1,116 former bank workers, as well as those he said, were sending in their letters of credit.
The National Industrial Court sitting in Lagos has ordered the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to pay over N5.7bn terminal benefits to over 1,000 bank workers affected by the re-capitalisation exercise of 2006.
The money is to be paid within three months from the date of judgment failing which it will attract 10 percent interest until liquidated.
Justice Paul Bassi made the order while delivering judgment on Monday in the case filed by 1,116 claimants who had approached the court since 2018.
The court also ordered the CBN and the NDIC to pay another N10m as general damages to the claimants.
Shouts of joy
Shouts of joy emanated from the representatives of the bank workers after the court delivered judgment in their favour.
It’s a battle they’ve fought since the consolidation exercise of 2006 which saw banks recapitalised from N2bn to N25bn.
Their banks did not meet the recapitalization requirements and their banking licenses were revoked by the CBN which appointed the NDIC as the liquidator.
The bank workers then sued the two organisations demanding the payment of their terminal benefits.
The two defendants raised several objections, insisting among other things they were not the employers of the workers and the suit disclosed no cause of action against them.
In his judgment, Justice Bassi dismissed the preliminary objections of the defendants and held while they may have acted in the general good by raising the capital base of banks in the country, it should not be done at the expense of the former employees.
By revoking the banking licenses of the non-consolidated banks, the defendants interfered with the employment contracts of the bank workers, a contract which would ordinarily have run its natural course with the claimants paid their benefits at the end.
The court then ordered the CBN and the NDIC to pay the workers within three months from the date of judgment failing which which it will attract 10 percent interest until liquidated.
“This is to inform the depositors, creditors, shareholders, and the general public that the operating licenses of the under listed Forty-Two (42) Microfinance Banks (MFBs) have been revoked by the Central Bank of Nigeria (CBN) effective 12th November 2020.
“The Nigeria Deposit Insurance Corporation (NDIC), the Official Liquidator of the banks whose licenses were recently revoked, is in the process of closing the listed banks and pay their insured Depositors,” the NDIC statement read in part.
The NDIC, therefore, request that all depositors of these banks should visit the closed banks’ addresses and meet NDIC officials for the verification of their claims, commencing from Monday, 21st December 2020 till Thursday, 24th December 2020.
The affected banks are listed below:
1 HEDGEWORTH MFB GUOBA PLAZA SUITE B06, – 171, A.E. EKUKINAM STREET, BY CHISCO, UTAKO, ABUJA
They are Ebele Chima (Commissioner – South East), Bassey Abia (Commissioner – South-South), and Mohammed Ibraheem (Commissioner – South-West).
The letter reads, “In compliance with the provision of Section 2(2) of the Nigerian Law Reform Commission Act No. 7 of 199, I wrote to forward to the Senate for confirmation the under-listed (4) names of nominees as Chairman and full-time members of the Nigerian Law Reform Commission.”
Similarly, President Buhari urged the lawmakers to confirm Diana Okonta (South-South); and Ya’ana Talib Yaro (North-East) as Non-Executive Directors of the Nigeria Deposit Insurance Corporation (NDIC).
According to him, the appointment of the nominees was done “in compliance with the provision of section 5(2)(4) of the Nigeria Deposit Insurance Corporation Act” to fill existing vacancies.
Relying on order 1(b) of the Senate Standing Rules, the Senate Leader, Yahaya Abdullahi, moved a motion for the upper chamber to expedite action on the President’s request for the confirmation of the NDIC nominees.
The Senate President, on his part, stressed the need for the lawmakers to “fast-track the process” to enable the Senate Committees to screen the nominees.
He, thereafter, referred the confirmation request of the NDIC nominees to the Senate Committee on Banking, Insurance, and Financial Institutions.
The committee, which is chaired by Senator Uba Sani, was given two weeks to report back to the Senate.
The defendant’s lawyer was said to have sent in word that he was stranded in Abuja.
Although the court was not happy about the development, it granted another adjournment to enable the defendants to file their reply to the interrogatories filed earlier by the former bank workers.
On the other hand, the other defendant – CBN – particularly asked the court for a short time to file its reply to the interrogatories.
The apex bank explained that it needed time to access its archives spread all over the country, in order to come up with an appropriate response to the interrogatories.
Reacting to the adjournment on behalf of his colleagues, chairman of the former bank workers, Magnus Maduka, reiterated their commitment to pursue the case to a logical conclusion to ensure that their terminal benefits and allowances were paid.
Interrogatories, also known as requests for further information, are a formal set of written questions by one party and required to be answered by another party or parties in a suit, in order to clarify matters of fact and help to determine in advance what facts will be presented at the trial of a case.
The Senate on Wednesday confirmed the appointment of new members to the Board of the Nigerian Deposit Insurance Corporation (NDIC).
Mrs Ronke Sokefun was confirmed as the Chairman of the NDIC Board, while a Senior Advocate of Nigeria, Mr Festus Keyamo (SAN), was among members of the board.
Other members of the NDIC Board are Garba Bello, Brigadier-General Josef O. J. Okoloagu, Mustapha Adewale Mudashiru, and Mr Adewale W. Adeleke.
Their appointments were confirmed after Senator Rafiu Ibrahim presented the report of the Committee on Banking, Insurance and other Financial Institutions.
The Deputy Senate President, Ike Ekweremadu, urged the NDIC Board to take their task seriously and responsibly.
“This is a very serious agency and, as such, I congratulate the chairman and members on their confirmation and I do hope that these very responsible Nigerians will live up to the expectations of this Senate and serve their Fatherland responsibly,” he said.
President Muhammadu Buhari has written the Senate to seek the confirmation of the appointment of Chairman and members of the Governing Board of the Nigerian Deposit Insurance Corporation (NDIC).
Senate President Bukola Saraki revealed this on Tuesday while reading the Executive Communication from President during plenary at the Upper Chamber of the National Assembly in Abuja, the nation’s capital.
In Executive Communication sent to the lawmakers by the President, the nominees include Olabode Mustapha (chairman, Ogun State), Festus Keyamo (member, Delta), and Garba Buba (member, Bauchi State).
Others are Bello Garba (member, Sokoto State), Joseph Okalogu (member, Enugu State), Mustapha Mudashiru (member, Kwara State), and Adewale Adeleke (member, Ondo State).
The letter reads, “In compliance with section 5 (4) of the Nigerian Deposit Insurance Act 2006, it is my pleasure to forward to the distinguished Senate the under listed nominees for confirmation as chairman and members of Nigeria Deposit Insurance Corporation. Their CVs are attached.
“It is my hope distinguished Senate will consider and confirm the nominees in the usual expeditious manner. Please accept Mr Senate President, the assurances of my highest consideration.”
In another letter, President Buhari asked the Senate to confirm Ateru Madami as the Resident Electoral Commissioner representing Niger State at the Independent National Electoral Commission (INEC).
Madami was nominated to replace the candidate earlier rejected by the lawmakers.
The letter also read, “It will be recalled that the Senate had earlier rejected the initial nominee on the grounds that he hails from the same Local Government Area and Senatorial district with a serving National Commissioner.
“While thanking the distinguished Senate immensely and anticipation of the early consideration and confirmation of the appointment, please accept the assurances of my highest consideration.”
The Nigeria Deposit Insurance Corporation (NDIC) is to investigate some banks over fraud related cases in their transactions.
A statement from NDIC’s HEAD, Communications and Public Affairs, Mohammed Ibrahim, said the move was in line with Section 35 and 36 of the NDIC Act No. 16 of 2006 for all Deposit Money Banks (DMBs) to submit monthly information/returns on fraud and forgeries to the Corporation.
“The Nigeria Deposit Insurance Corporation (NDIC) is to investigate some banks for the inadequate rendition of returns to the Corporation,” Ibrahim said on Sunday.
The commission is faulting banks for their failure to deliver returns on instances of fraud, forgeries, and cases involving members of their staff who were either dismissed or had their appointments terminated on grounds of fraudulent activities.
“Section 35 and 36 of the NDIC Act No. 16 of 2006 (as amended) requires all Deposit Money Banks (DMBs) to submit monthly information/returns on fraud and forgeries to the Corporation,” the statement read in part.
Ibrahim explained that NDIC made the decision in the light of the most recent report from its Off-Site Supervision of the DMBs which revealed the number of fraud cases attributed to internal abuse by staff of banks increased from 231 in 2016 to 320 in 2017, or 38.53% above the figure reported for the previous year.
It was observed that the report relied on a total of 286 responses received from 26 banks during the period. Also, there were 22 NIL monthly responses from the banks as at year ended 31st December 2017.
On Internet banking and ATM/Card-related fraud, the agency reported constituted 24,266 resulting in 92.68% of all the reported cases. It, however, regretted the avoidable loss of ₦1.51 billion of losses in the Industry in 2017.
The report also documented other miscellaneous crimes such as fraudulent transfers/withdrawals, cash suppression, unauthorized credits, fraudulent conversion of cheques, diversion of customer deposits, diversion of bank charges, presentation of forged or stolen-cheques among others.
It is expected that banks would adopt internal control measures in the wake of proactive corrective measures taken to ensure their compliance with good corporate governance principles.
The House of Representative Committee on Banking and Currency has opened a public hearing on how to address dormant accounts in commercial banks.
The Chairman of the Committee, Honourable Jones Onyerere, said the amendment of the Financial Institution Act would help address the use of funds from dormant accounts as income for commercial banks.
The hearing session, which took place on Monday in Abuja, had in attendance representatives from the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) among others.
In their various remarks, the CBN official, Kofo Abdulsalam-Alada, and the NDIC Director of Legal Services, Belema Taribo, suggested how to manage dormant accounts.
However, government agencies disagreed on who should manage the funds from dormant accounts.
Recent statistics from the Nigerian Inter-Bank Settlement System reveal that the total number of inactive bank accounts in Nigeria stands at 30.2 million, despite efforts by banks to retain old customers and attract new ones.
About 64.128 million accounts that represent 68.7% of the total activated accounts domiciled in commercial banks are said to be functional.
Financial experts have described amendment of the Financial Institution Act to better manage dormant accounts as timely.
The passage of the bill is expected to eliminate the possibility of banks to convert dormant account balances into income, as well as strengthen risk management.
The Nigeria Deposit Insurance Corporation (NDIC) has organised a stakeholders meeting for the business community in Kano State, as part of efforts to enlighten bank customers and other consumers of financial services on their rights.
The Managing Director of the NDIC Umar Ibrahim said Nigeria is in dire need of a positive attitude to revamp the economy in which customer protection will help promote financial stability in the country.
The aim of the town hall meeting, conceived to address the concerns and expectations of depositors especially small depositors who may lack or have limited capacity to fight for their rights in the complex financial system of modern banking.
A representative of the Central Bank of Nigeria, (CBN) Tijani Zakirai said the Apex Bank has been working with the NDIC and other stakeholders in the effective mobilization of bank customers across the country, but the lack of a sustained sensitization and enlightenment program remains a major hindrance to the country’s financial inclusion.
Meanwhile, traders and many other members of the Kano business community raised various financial and business questions why the regulatory authorities offered advises.
While the NDIC promises to sustain the program on annual basis, most people in hope to see more of this gathering for strong and effective financial system in the country.
The Chief Justice of Nigeria (CJN), Mahmud Mohammed, has called for collaboration between the judiciary and the financial sector to resolve the nation’s economic challenges.
Justice Mohammed made the call when he announced that the judiciary was developing a multi-track justice delivery system that embraces “alternative dispute resolution”.
He made the announcement at a seminar for judges organised by the Nigerian Deposit Insurance Corporation (NDIC) in Abuja, Nigeria’s capital.
The Chief Justice believed that the judiciary could step up its processes by collaborating with the financial sector.
He stated that one way of delivering speedy and amicable justice was the alternative dispute resolution.
Justice Mohammed was optimistic that the banking sector would embrace initiative for an efficient and effective collaboration with the judiciary.
The Judges’ Sensitisation Seminar was attended by High Court judges across the 36 states of the federation and the Federal Capital Territory.
The Managing Director of NDIC, Umaru Ibrahim, informed the gathering that the meeting was convened to create a synergy between the judicial officers and the financial sector, especially in the light of Nigeria’s economic recession.
The Managing Director/Chief Executive of Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim has expressed concern over the increasing wave of non-performing insider loans in various banks and its consequence on the stability of the nation’s banking system.
Alhaji Ibrahim expressed this concern while receiving the newly elected President and Chairman of Council of the Chartered Institute of Bankers of Nigeria (CIBN), Professor Segun Ajibola and some of his executive members who paid a courtesy call on the NDIC Senior Management in Abuja.
According to him, the development had posed credibility questions which were capable of eroding public confidence in the banking system.
He called for strict compliance with the existing code of conduct and a review of the existing laws and regulations to provide stiffer penalties for directors who take advantage of their positions and fail to pay back their loans.
The NDIC CEO observed that the situation in which casual staff accounted for about 25% of the banking industry workforce, had a negative impact on the industry.
Alhaji Ibrahim noted with concern the practice of some banks that assign sensitive roles to casual staff; thereby exposing the banking industry to cases of fraud and forgeries.
Speaking on the recent staff rationalisation embarked upon by banks, Alhaji Ibrahim urged the banks to exercise caution so as not to create industrial unrest in the industry.
He called on the CIBN to intervene by advising its members on the aim of the rationalisation which should be to weed out bad eggs from the industry.
The NDIC CEO emphasized that the Corporation would continue to partner with the CIBN and other professional bodies towards achieving effective capacity building among its staff.
Alhaji Ibrahim disclosed that 77 members of staff of the Corporation were currently undergoing the Bangor/CB MBA programme which commenced three years ago.
The Bangor/CB MBA programme is an initiative of the NDIC, the CIBN and the Bangor University, Scotland where staff of the Corporation undergo up to 24 months training programme and graduate with dual certification: an MBA and Chartered Banker of Scotland. Fourteen (14) members of staff had already graduated from the programme.
He further requested the CIBN to fast track the accreditation of the Corporation’s training academy and the introduction of the Deposit Insurance System (DIS) in the institute’s curricula in order to broaden the scope of professionalism in the banking industry.
In his response, the President/Chairman of Council of the Chartered Institute of Bankers of Nigeria (CIBN), Prof. Segun Ajibola, expressed the appreciation of the CIBN to the Corporation for positive contributions to the activities and programmes of the Institute and its support towards the establishment of the CIBN Bankers House in Abuja.
Prof. Ajibola also commended the Corporation for its contribution in ensuring stability in the banking system.
The President/Chairman of Council of the CIBN assured the MD/CEO that the accreditation committee of the institute would soon visit the NDIC Academy.
He, however, appealed to the MD/CEO on the need for further collaboration with the institute on training and other issues of mutual interest.
On staff casualization in the banks, Prof. Ajibola pledged to table the matter at the CIBN’s next meeting with banks’ CEOs with a view to addressing the issues.
He stated that efforts were being put in place by the CIBN to enhance the capacity of bank staff, particularly in credit administration.