The Nigeria Deposit Insurance Corporation (NDIC) says it has begun paying insured deposits to customers of the 46 microfinance banks (MFBs) whose licences were revoked by the Central Bank of Nigeria (CBN).
Managing Director and Chief Executive Officer (CEO) of the Corporation, Thompson Oludare Sunday, spoke on Wednesday on the sidelines of a retreat for members of the house of representatives committee on insurance and actuarial matters in Lagos.
Sunday said the corporation moved into liquidation immediately after the CBN revoked the licences of the affected MFBs and appointed the NDIC as provisional liquidator.
“We’ve started paying depositors of those banks, and gradually, we intend to cover all the insured depositors,” he said.
He said the corporation would recover outstanding loans owed to the failed institutions and dispose of their assets to generate funds for the payment of uninsured deposits.
“Our function as liquidator would involve payment of guaranteed sums. Thereafter, what we do is we go after those who are owing the institutions and have not paid,” he said.
“We also make sure that we sell the assets that are available and realise their investments towards paying the uninsured portion of the deposits.”
The NDIC boss said the corporation has also introduced an automated reimbursement process through its collaboration with the Nigeria Inter-Bank Settlement System (NIBSS), allowing depositors with bank verification numbers (BVNs) to receive payments through their alternative bank accounts without filing claims.
“Hitherto, we used to depend on people to come and file for payment, but now, in collaboration with the Nigeria Inter-Bank Settlement System, what we do is, for every account that has a BVN, we trace your alternative account in other institutions and make payments to you automatically. The more we discover those, the more we start payment,” he said.
HERITAGE BANK LIQUIDATION
Speaking on the liquidation of Heritage Bank in 2024, Sunday said about 700,000 depositors have received their insured deposits, while the corporation is still tracing others whose records could not be easily verified.
The managing director said the challenge stems from Heritage Bank’s inherited customer accounts from defunct institutions, including Enterprise Bank, Spring Bank and Guardian Express Bank, many of which predated the introduction of the BVN.
“There are depositors that we have not been able to trace, and this is an opportunity for them to also come forward. Once they come forward, and those we’ve seen in the databases of the institution, we have been paying,” he said.
Sunday noted that proceeds from loan recoveries and the disposal of Heritage Bank’s assets would be used to pay depositors with balances above the insured limit.
The NDIC chief also said the recently concluded banking sector recapitalisation exercise has strengthened banks’ capacity to support economic growth.
However, he noted that stronger capital alone would not guarantee financial system stability.
“The recently concluded banking sector recapitalisation programme represents a significant milestone in strengthening the capacity of Nigerian banks to support economic development,” Sunday said.
“However, while recapitalisation enhances the resilience of financial institutions, it must be complemented by effective regulation, sound governance practices, strong risk management frameworks and good compliance culture, all attributes of a reliable financial safety net.”
The managing director said the rapid growth of financial technology (fintech) has improved financial inclusion but also increased exposure to cyber threats, fraud, operational risks, and data breaches, making stronger collaboration among regulators essential.
The NDIC, had on July 1, commenced the liquidation of the 46 microfinance banks after the CBN revoked their operating licences for failing to meet regulatory requirements.
At the time, the corporation said it had begun verifying depositors’ claims and would pay insured deposits in line with its mandate under the Banks and Other Financial Institutions Act (BOFIA) 2020 and the NDIC Act 2023.