The Nigerian Deposit Insurance Commission is to pay depositors the full amount the deposited in the microfinance banks whose licenses were revoked recently

Depositors in the Microfinance Banks, MFBs, whose licenses were revoked by the the Central Bank of Nigeria, CBN, have cause to smile. The Nigerian Deposit Insurance Commission, NDIC, has promised to cover 100 percent of the deposited funds in the MFBs. The NDIC also said that majority of the depositors in the Microfinance Banks, MFBs, whose licenses were revoked have less than N200,000 in their accounts. The CBN revoked licences of 154 MFBs due to their insolvency.

At the NDIC special day at the ongoing Lagos international trade fair, Umaru Ibrahim, managing director, NDIC, said CBN revoked the licences due to erosion of their capital base, poor liquidity, inept management as well as some insiders helping themselves with loans they never intend to pay back, and further worsened by boisterous life style of management that remained at variance with the philosophy of microfinance banking operations.

“The NDIC has commenced verification of insured depositors and will soon start paying the verified claims to appropriate depositors in fulfilment of our core mandate.

“It is useful to inform us that, the NDIC, in collaboration with the CBN, adopted bridge bank option to resolve the failure of Skye Bank Plc. A bridge bank is a temporary bank created to operate a failed bank until a buyer can be found. The benefit of a bridge bank is not far-fetched: The resolution option is less disruptive to rendition of bank services, unlike outright liquidation or depositors’ payoff. It is also less costly to the entire macro-economy, while staff are retained in the bridge bank,” he said.

– Nov. 9, 2018 @ 17:05 GMT |