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Business News of Wednesday, 1 November 2023


'We're paying' - NDIC pays N1.2bn to 34,000 depositors of liquidated I79 microfinance banks

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The Managing Director of Nigeria Deposit Insurance Corporation (NDIC), Bello Hassan, has said that the Corporation has refunded over 1.2 billion to about 34,000 depositors of the liquidated 179 microfinance banks whose licenses the Central Bank of Nigeria (CBN) revoked.

Hassan disclosed this on Tuesday, October 31, 2023, during the sensitization of Judges of the National Industrial Court of Nigeria (NICN) and members of the Investments and Security Tribunal in Port Harcourt.

NDIC pledges to refund depositors of distressed banks

Hassan said via his representative at the event, Mustapha Ibrahim, that the seminar was important for stakeholders to know the workings and operations of the agency.

According to him, the Corporation’s first mandate is deposit guarantees, stating that it has settled depositors of the recently closed 179 microfinance banks and four primary mortgage banks.

Punch reports that the NDIC boss said that the functions of the Corporation include deposit guarantee, bank supervision, distress resolution, and bank liquidation, stating that after license revocation, the NDIC has the mandate to liquidate insured financial institutions with revoked licenses.

Hassan stated that some of the challenges of the NDIC include judgment execution against the Corporation for banks' liabilities in liquidation.

He noted that the agency and the Central Bank of Nigeria have successfully liquidated many Deposit Money Banks and Primary mortgage banks whose licenses were revoked by the apex bank, and their depositors fully refunded from recovered debts and liquidated assets.

CBN announces liquidation of 179 microfinance banks

In May 2024, reported the revocation of the licenses of the microfinance banks by the CBN. The announcement was made in the official gazette of the Federal Government, which was published on the CBN's website on Tuesday, May 23, 2023.

According to the gazette, these financial institutions had their licenses revoked due to several reasons.

Firstly, they had ceased to conduct business in Nigeria for six months, contrary to the purpose for which their licenses were granted.

Secondly, they failed to fulfill or comply with the set conditions when their licenses were issued.

Lastly, they still need to meet the obligations imposed upon them by the CBN by the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5.