Uche Usim, Benin
Soothing news came the way of 154 Microfinance Banks (MFBs) and six Primary Mortgage Banks (PMBs) whose operating licenses were recently revoked by the Central Bank of Nigeria (CBN) as the Nigeria Deposit Insurance Corporation (NDIC) is set to pay them their insured deposit sum.
This was as number of licensed Mobile Money Operators (MMOs) by the Central Bank of Nigeria has increased to 23.
Addressing Business Editors and members of Finance Correspondents Association of Nigeria ( (FICAN) at a seminar in Benin City, the NDIC Managing Director, Mr. Umaru Ibrahim, represented by Director, Insurance and Surveillance department, Mohammed Y. Umar, said arrangements to commence payment had since been tidied up.
According to him, of the 23 MMOs, eight are bank led, while 15 are non-bank led.
He hinted that the amount provided by NDIC as deposit insurance coverage to the subscribers of MMOs in the event of liquidation is maximum limit of N500,000.
Ibrahim also said it has commenced verification of insured depositors of the affected financial houses preparatory to commence the payment to insured depositors.
“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 “, said Ibrahim.
He stressed 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.
NDIC MD gave his assurance that his organisation 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.
Underscoring choice of workshop theme: ” financial inclusion, consumer protection and the evolution of virtual currencies in Nigeria “, NDIC boss the theme was deliberately structured to lay bare the challenges faced by the banking system with respect to various emerging issues to that it could be examined and solutions proffered to them.