June 13, 2024
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The Nigeria Deposit Insurance Corporation (NDIC) will pay depositors of closed microfinance and primary mortgage banks after recovering debts from those owing the failed banks, among others.

This was disclosed on Monday by a source close to the NDIC, who is familiar with the matter.

Recall that the NDIC disclosed on Thursday that it obtained winding-up orders for 96 out of 183 microfinance and primary mortgage banks following the withdrawal of their licenses by the Central Bank of Nigeria(CBN) in May 2023.

The disclosure was made at a sensitization seminar for Federal High Court judges in Lagos on Thursday.

Managing Director, NDIC, Bello Hassan said,“As at date, the Corporation had obtained Winding up Orders for 96 out of 183 Micro Finance and Primary Mortgage Banks whose licenses were revoked by the CBN in May 2023, in less than one Year of revocation.”

“We recognise the judiciary as one of our critical stakeholders. With this, when cases are brought before them, they can receive accelerated hearing and proclamation of Justice.”

Speaking further on the development, the source, who craved anonymity, said NDIC’s job does not crystalize without the CBN revoking the licenses of affected banks that breached some of the laws of the apex bank regulator.

The source noted that the sale of the affected bank assets and the recovering monies owed by debtors is central to the corporation’s ongoing plans to refund depositors of the affected banks.

“When the license is revoked, and we have winding up order, after everything is done, what we intend to do is that it gives us power to get into the banks and realize their assets.

“In realizing assets, we tend to look for people that are owing the banks, the debtors, their assets and sell so that we can pay depositors.

“The (closed) bank already have asset, buildings, cars, etc. When we say realize the asset, we sale the assets to get all the money we can gather to pay depositors their balance.”

“It is from sale of the assets and realization of debts from debtors that we will use to pay those people.”

The source said that the NDIC does not stop at obtaining a winding-up order, explaining that there are several official and legal steps to be taken to ensure depositors are paid.“There are different things to be done. If CBN has revoked the license, what it tells you is that we are moving to another phase. We have paid depositors. We have gotten license to wind down officially and legally. Then, we start selling assets,” he added.

The source added that though the NDIC does not “have control over” the time frame of carrying out the proper closure of the affected banks as well as settlement of depositors, its step-by-step procedures will ensure timely refunds to depositors.

Ten months ago, NDIC saying it has begun the process of payment of depositors in 179 microfinance banks and four primary mortgage banks across the country.

The commission called on depositors affected by the liquidation to provide alternate bank accounts in commercial banks for their payments.

The NDIC is the government’s agency responsible for guaranteeing the payment of deposits up to the maximum limit in accordance with its statute in the event of failure of an insured financial institution.

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