CBN Pays Out N2 billion Settlement to Customers of Liquidated Fortis Microfinance Bank

THE Nigeria Deposit Insurance Corporation (NDIC) on Wednesday said it liquidated Fortis Microfinance Bank (FMB) to protect the interest of depositors.

It said the bank went into distress because of mismanagement and abysmal corporate governance practices

The Central Bank of Nigeria (CBN) released N2 billion to pay depositors of the troubled Fortis Microfinance Bank (FMB), the NDIC added.

It said there was no cause for anxiety by depositors of Fortis MFB because the NDIC had realised assets to pay in full the deposits of the customers of 19 banks previously liquidated.

The corporation also said the liquidation of Fortis MFB is ongoing and efforts are being made to enable the NDIC pay depositors with funds in excess of the insured limits.

The corporation made the clarifications in a statement by its Director for Communication and Public Affairs, Dr. Sunday Oluyemi, against the backdrop of fears by some depositors.

One of the depositors, Mrs. Uju Ohanenye, alleged that N222.4million out of the fixed deposit of N301million in Fortis MFB was still trapped.

But the NDIC said it will protect the interest of all depositors.

The statement said: “Contrary to misleading reports, the Nigeria Deposit Insurance Corporation (NDIC) has adhered to statutory guidelines on the distress resolution and liquidation of Fortis Microfinance Bank (MFB) Plc. and the protection of interest of depositors.

“Initial efforts by regulatory authorities involved the setting up of joint CBN/NDIC Interim Management Committee (IMC) to manage the affairs of the MFB to stem the tide of its mismanagement and also to protect the interest of its depositors.

“The sum of N2 billion was released to the Committee by the CBN to pay depositors of the troubled MFB in order to ease their hardship before its licence was revoked.

The corporation also released facts and figures behind the liquidation of Fortis Microfinance.

It attributed the failure of the bank to mismanagement.

The statement said: “As the fortunes of Fortis MFB Plc began to decline due to mismanagement and abysmal corporate governance practices, the CBN, in collaboration with the NDIC, took several actions to address its deteriorated financial condition.

“The intervention of regulatory agencies in the resolution of the defunct Fortis MFB was in two phases. The first phase involved corrective and supervisory measures, which eventually included the sacking of the Executive Management, dissolving the Board of Directors and the appointment of a joint CBN/NDIC Interim Management Committee (IMC) to temporarily manage the affairs of the MFB. One of the reasons for the setting up of the IMC, among others, was the need to protect the interests of the depositors.’’

Source: The Nation

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Victor Okeh is a graduate of Economics from Lagos State University. He is versatile in reporting business and economy, politics and finance, and entrepreneurship articles. He can be reached via – [email protected]

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