Nigerian Deposit Insurance Corporation starts reimbursing customers of 46 collapsed microfinance banks

n n

The Nigeria Deposit Insurance Corporation has commenced the payment of insured deposits to customers of 46 failed microfinance banks whose operating licences were revoked by the Central Bank of Nigeria, while intensifying loan recoveries and asset sales to reimburse depositors with balances above the insured limit.

n

Managing Director and Chief Executive Officer of the NDIC, Thompson Sunday, disclosed this on Wednesday in Lagos during a retreat for members of the House of Representatives Committee on Insurance and Actuarial Matters.

n

Speaking on the sidelines of the event, Sunday said the corporation moved swiftly to begin liquidation after the CBN revoked the licences of the affected MFBs and appointed the NDIC as provisional liquidator.

n

“We’ve started paying depositors of those banks, and gradually, we intend to cover all the insured depositors,” he said.

n

According to him, the NDIC is also pursuing debtors of the failed institutions and disposing of their assets to generate funds for the payment of uninsured deposits.

n

“Our function as liquidator involves paying the guaranteed sums. Thereafter, we go after those owing the institutions and ensure that available assets are sold to realise funds for settling the uninsured portions of deposits,” Sunday said.

n

He said the corporation had overhauled its reimbursement process through a partnership with the Nigeria Inter-Bank Settlement System, enabling automatic payments to depositors through their Bank Verification Number.

n

Under the arrangement, depositors with linked BVNs receive payments directly into their accounts in other banks without filing claims, thereby reducing delays in accessing insured funds.

n

Sunday said the same approach had accelerated payments to depositors of Heritage Bank, where about 700,000 customers have already received their insured deposits since the lender’s licence was revoked.

n

He, however, noted that some Heritage Bank depositors were yet to be traced because the bank inherited customer accounts from legacy institutions, including Enterprise Bank, Spring Bank and Guardian Express Bank, many of which predated the BVN system.

n

“There are depositors that we have not been able to trace, and this is an opportunity for them to come forward. Once they do, we will pay them,” he said.

n

He added that proceeds from loan recoveries and the sale of assets belonging to failed banks would be used to settle depositors whose balances exceeded the insured limit.

n

Sunday also said the recent banking sector recapitalisation had strengthened lenders’ ability to support economic growth but stressed that stronger capital must be complemented by effective supervision, sound corporate governance and robust risk management to safeguard financial stability.

n n