In a move indicative of its commitment to financial stability and consumer protection, the Nigeria Deposit Insurance Corporation (NDIC) has disbursed a cumulative insured sum of N1.393 billion to 36,163 depositors affected by the closure of 110 Microfinance Banks (MFBs) and three Primary Mortgage Banks. This announcement was made by Bello Hassa, the Managing Director/CEO of the Corporation, during the NDIC special day at the 2023 Lagos International Trade Fair, which is themed ‘Connecting Businesses, Creating Value.’
The rapid response from the NDIC comes in the wake of the recent revocation of licenses by the Central Bank of Nigeria (CBN) for several Microfinance Banks and Primary Mortgage Banks. Hassa proudly revealed that the NDIC, in collaboration with the CBN, promptly initiated the liquidation process. Impressively, the insured sums were disbursed to depositors within an unprecedented three days of the banks’ closure.
Payments of the statutory insured sums are still ongoing, with a particular focus on depositors whose funds exceed the insured limit. These individuals are set to receive liquidation dividends once the NDIC concludes the recovery of debts and the sale of the closed banks’ physical assets. The NDIC’s efficiency in executing this process underscores its dedication to providing swift financial relief to affected depositors.
In addition to the ongoing disbursements, Hassa disclosed that the NDIC is actively engaged in verifying and processing liquidation dividends for depositors and stakeholders of 20 banks currently in liquidation. The list includes well-known names such as Allied Bank, Peak Merchant Bank, Commerce Bank, Continental Merchant Bank, Financial Merchant Bank, Fortune Bank, Gulf Bank, Hallmark Bank, Icon Merchant Bank, Liberty Bank, Nigeria Merchant Bank, North South Bank, Premier Commercial Bank, Prime Merchant Bank, Progress Bank, and Merchant Bank.
Depositors of these institutions, which were closed by the CBN 15 years ago, are urged to come forward for the payment of their insured deposits. This call serves as a crucial reminder for individuals to stay informed about their financial institutions and exercise their rights in situations where closures or liquidations occur.
Hassa emphasized the importance of collaboration with the CBN to ensure effective supervision of banks and adherence to prudential thresholds and corporate governance codes. This collaborative effort is vital for safeguarding the safety and stability of the Nigerian banking system, and the NDIC remains committed to this cause.
In a cautionary note, Hassa urged the general public, especially traders and businessmen, to prioritize saving their funds in licensed banks. He discouraged the patronage of wonder banks and ponzi schemes, highlighting the often devastating consequences that leave victims with untold stories. This advice resonates as a proactive measure to protect individuals and businesses from potential financial risks.
Hassa also shared that the NDIC, in its efforts to boost depositors’ confidence, continues to address genuine cases of infractions and complaints related to insured institutions. This commitment to transparency and accountability is essential for maintaining trust in the financial landscape.
Bimbo Olashore, Vice President of the Lagos Chamber of Commerce & Industry (LCCI), expressed gratitude to the NDIC for being a consistent and reliable partner of LCCI over the years. He emphasized the significance of the Lagos International Trade Fair as the largest and most vibrant fair in West Africa. The fair provides a crucial platform for businesses to showcase and advertise their goods and services, contributing to economic growth and development.
The NDIC’s swift response in disbursing insured sums to depositors affected by the closure of Microfinance Banks and Primary Mortgage Banks reflects its commitment to financial stability and consumer protection. The ongoing verification and processing of liquidation dividends for other banks in liquidation further demonstrate the Corporation’s dedication to resolving financial issues promptly and transparently. As the Lagos International Trade Fair continues, the NDIC’s role in safeguarding the Nigerian banking system and boosting depositors’ confidence remains a cornerstone of financial security and stability.