NDIC to revoke licences of 37 Micro Finance Banks

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    The Nigeria Deposit Insurance Corporation, NDIC, is set to revoke licences of 37 Micro Finance Banks,MFBs, due to their inability to meet necessary regulatory conditions.

    The Chairman of the Nigeria Deposit Insurance Corporation, NDIC, Ronke Sokefun, said the banks were listed for closure in the first quarter of 2020.

    Sokefun who said this during a chat with the theme: “A Conversation on Deposit Insurance, Banking Supervision, Failure Resolution and Bank Liquidation in Nigeria,” also called for a timeline for the existence of any bridge bank.

    Speaking at the event organised by Babalakin & Co Legal Practitioners, the NDIC head said: “The truth of the matter is that most of the MFBs and Primary Mortgage Banks (PMBs) don’t meet our conditions. As at the end of Q1, 37 MFBs were listed for closure. They could no longer pay their depositors, cessation of businesses and persistent non-rendition of monthly returns.

    She said there was clear indication of failure as during the period, PMBs had insured deposits of N112 billion but non-performing loans was N65bn. “So, more often like I said, a lot of these MFBs and PMBs don’t meet the conditions which we set to enable us to rescue them,” Sokefun noted.

    On a bridge-bank, she said it was a temporary arrangement meant to acquire the assets and liabilities of a failed bank, until final resolution is achieved and to ensure stability in the financial system.

    She said the CBN and NDIC must agree on a timeline for any bridge bank, because anything that doesn’t have time can’t be measured.

    On Polaris Bank (for Skye Bank), NDIC said it remains a bridge bank by CBN until the NDIC find interested investors. “That intervention saved over 6,000 jobs. The bank had well over 200 branches and deposit was in excess of N940 billion, which depositors still have unhindered access to.”

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