NDIC Warns Against Diversion of Funds Recovered from Failed Banks

 

By Atlantic Reports

The Nigeria Deposit Insurance Corporation (NDIC) has warned that it will not tolerate the diversion of funds generated from the sale or recovery of assets belonging to failed banks.

The corporation’s Director of Asset Management, Oluyinka Ogungbemi, gave the warning on Monday, November 9, 2026, at a stakeholders’ seminar and public relations workshop organised by the Asset Management Department in Abuja.

Ogungbemi said NDIC staff do not have direct access to funds realised from asset recovery, emphasising the corporation’s position against financial misconduct in the liquidation process.

Loan recovery remains a major challenge

The director identified asset realisation as one of the most difficult aspects of bank liquidation, describing loan recovery as particularly challenging.

He explained that recovering outstanding loans after a bank has closed can be more difficult than pursuing them while the institution is still operating.

According to him, delays in recovery efforts can reduce the value of assets and make outstanding debts increasingly difficult to collect.

He therefore urged stakeholders involved in the process to prioritise timely recovery and ensure that assets are properly managed.

NDIC seeks stronger stakeholder collaboration

Ogungbemi said the workshop was organised to improve loan and asset recovery, strengthen professional relationships and reinforce public confidence in the corporation’s liquidation activities.

He described the engagement as part of a deliberate strategy by the Asset Management Department to improve asset realisation through stronger cooperation with relevant stakeholders.

He also urged participants to maintain professional standards and demonstrate accountability in carrying out their responsibilities.

Transparency in liquidation process

The NDIC’s warning highlights the importance of transparency in managing the assets of failed financial institutions, particularly because recovered funds may be used to meet obligations to depositors and other creditors.

The effectiveness of the liquidation process depends not only on recovering outstanding loans and selling assets but also on ensuring that proceeds are properly accounted for and distributed in accordance with applicable procedures.

While the corporation has reiterated its zero-tolerance position on diversion, sustained accountability will depend on effective oversight, transparent reporting and timely resolution of recovery cases.

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