NDIC commences payment to depositors of 154 failed MFBs

The Nigeria Deposit Insurance Corporation (NDIC) said it had commenced payment to depositors of 154 micro finance banks (MFBs) that the Central Bank of Nigeria (CBN) revoked their licenses in 2018 due to insolvency.

Umaru Ibrahim, managing director, NDIC, said this at the corporation’s day at the ongoing 14th edition of Abuja International Trade Fair. The event scheduled for Sept. 21 to Sept. 29 is with the theme “Remodeling SMEs Financing: Option and Solutions’’.

Represented by Mustapha Ibrahim, director of research, NDIC, the managing director said that the payment was extended to depositors of six primary mortgage banks (PMBs).

According to Ibrahim, in the last quarter of 2018, the CBN revoked the licenses of 154 MFBs and six PMBs due to their insolvency and corporate governance issues.

“Hence, the corporation successfully liquidated the failed banks and has commenced payment to the depositors of the failed banks,’’

Ibrahim said. He said that the corporation had investigated and mediated to address complaints from bank customers on various issues that affect them.

“As of June 30, the corporation received 35 petitions/complaints from banks customers on various issues such as ATM frauds, unauthorized funds transfer and cheques related issues. “Investigations were carried out and where necessary and customers were appropriately reprieved,’’ he said.

He said that NDIC would continue to work with CBN to ensure effective supervision of banks and the adherence to prudential guidelines and code of corporate governance for banks. Ibrahim said that this was to ensure their safety and the overall stability of the Nigerian financial system.

He, however, urged small savers to avoid depositing their money with thrift collectors.

“It is imperative to point out the need for traders, artisans, farmers and other small savers to ensure that their savings are deposited in banks or other licensed deposit-taking financial institutions nearest to them.

“This is to avoid losses that could result from incidents of burglaries and other forms of crimes,’’ Ibrahim added.

Earlier, Adetokunbo Kayode, president, Abuja Chamber of Commerce and Industry (ACCI), identified deposit insurance as one of the important pre-requisites for building the confidence of the depositors in the formal banking system. Represented by Tonia Shoyele, director-general, ACCI, Kayode said that governments in developing and advanced economies grant formal deposit insurance with the aim of reducing the risk of systemic failure of banks.

“By bolstering depositors’ confidence in the stability of the system, deposit insurance may lead to a deeper financial system, which could contribute to higher economic growth rates,’’ he said.