The Nigeria Deposit Insurance Corporation (NDIC), on Wednesday, offered insights why the Central Bank of Nigeria (CBN) revoked the licenses of 154 Microfinance Banks (MfBs) and six Primary Mortgage Banks.
Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, said the revocation became necessary due to the erosion of their capital base, poor liquidity; inept management as well as insiders helping themselves with loans that they never intend to pay back.
He added that the situation was furthered worsened by the boisterous lifestyle of the management of these banks that remained at variance with the philosophy of microfinance banking operations.
Represented by the Controller, Nigeria Deposit Insurance Corporation (NDIC), Kano Zonal office, Alhaji Bashiru Nuhu, at the 2018 Kano International Trade Fair, he said that the NDIC has commenced the verification of all the insured depositors adding that they would soon pay the verified claims to the appropriate depositors.
He added that, “From the records obtained so far, majority of the depositors, especially in the MFBs, have less than N200,000.00 in their accounts, which implied that the NDIC will hopefully cover 100% of the depositors” funds in the affected MFBs”
The Managing Director further stated that to enhance the financial system stability in subsequent periods and to forestall the reoccurrence of disappointments, the corporation has embarked on public awareness campaigns explaining the roles and responsibilities of the customers to their banks and vice versa.
“This will essentially instill market discipline on the part of the depositors to ever be more vigilant in choosing financial institutions to bank with “he stated.
He said stressed the need for traders, artisans and farmers to always ensure that their savings are deposited in banks or other financial institutions nearest to them to avoid loses that could result fire incidents, burglaries and other forms of crimes.