NDIC Begins Payment of Shut Microfinance Bank Customers

The Nigeria Deposit Insurance Corporation (NDIC), will soon commence payment of insured deposits to customers of the 154 Microfinance banks and six ( 6) Primary Mortgage Banks ( PMBs) whose operating licenses were recently revoked by the Central Bank of Nigeria ( CBN).

The Managing Director of NDIC, Mr Umaru Ibrahim disclosed who this on Tuesday in Benin, while declaring open the 15th Edition of the Business Editors and Finance Correspondents workshop (FICAN), said the corporation has begun verification of the insured depositors preparatory for their payments.

Represented by Director, Insurance and Surveillance Deparment of NDIC, Mr Mohammed Y. Umar, the Managing Director said arrangements to commence payments had been concluded.
” As you are all aware, the CBN recently revoked the licences of 154 microfinance banks and six Primary Mortgage Banks due to their insolvency. The affected institutions were closed because some were found to have insufficient assets to meet their liabilities, while others had their capital to risk – weighted assets ratio a and regulatory capital below the minimum prescribed by the CBN”.
” Further more , quite a number of the banks had ceased to carry on the type of banking business for which their licences were issued for a continuous period of more than six months while others had gone in to voluntary liquidation “, he recalled.Umaru stated that records obtained so far by the corporation in respect of the affected financial institutions revealed that, majority of depositors  especially those in MFBs have less than N200,000 in their accounts, an indication that NDIC will cover 100 percent of the depositors.
The MD however assured that the corporation will consistently work in harmony with CBN to ensure effective supervision of the banks in order to ensure strict adherence to rules and obligations guiding banking operations.
” This is with a view to protecting depositors against fragrant disregard of extant rules by management of financial institutions thereby mitigating the occurrence of unlawful insiders’ dealings, weak internal control and over all non compliance to Prudential guidelines “.
” Also, the NDIC, in collaboration with all relevant key players in the nation’s financial system, will continue to work on several initiatives to accelerate financial  literacy and financial inclusion, especially among rural communities nationwide so as to promote inclusive growth nation wide”, he said.Justifying the choice of the workshop  theme: “Financial Inclusion, Consumer Protection and the Evolution of Virtual Currencies in Nigeria”, he said it was deliberately structured to lay bare the challenges faced by the banking system with respect to various emerging issues so that it could be examined and solutions proffered to them.

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