NDIC Refunds N1.2 Billion to Depositors of Closed Microfinance Banks: Strengthening Financial Confidence and Justice

The Nigeria Deposit Insurance Corporation (NDIC) has announced the reimbursement of over N1.2 billion to approximately 34,000 depositors affiliated with 179 microfinance banks, whose licenses were recently revoked by the Central Bank of Nigeria (CBN).

The disclosure was made by Mr. Bello Hassan, the Managing Director of NDIC, during the 2023 Sensitisation Seminar held in Port Harcourt, Rivers State. Speaking at the event on behalf of Mr. Hassan, Mr. Mustapha Ibrahim, the Executive Director of Operations at NDIC, emphasized the importance of the seminar in facilitating an understanding of NDIC's operations and intricacies among stakeholders. 

Addressing the theme of the seminar, "Strengthening Depositors’ Confidence in Banks and Other Financial Institutions through Speedy Dispensation of Justice," Mr. Hassan underscored the significance of strategic collaboration with the judiciary to enhance financial system stability in Nigeria.

Highlighting NDIC's primary mandate of deposit guarantee, Mr. Hassan explained the ongoing resolution of the closure of 179 microfinance banks and four primary mortgage institutions in an organized manner. He revealed that the corporation had already settled over 34,000 depositors, disbursing N1.2 billion to meet the financial obligations of these depositors, with the process still underway. 

Elaborating on NDIC's statutory functions, including deposit guarantee, bank supervision, distress resolution, and bank liquidation, Mr. Hassan emphasized the corporation's authority to liquidate insured financial institutions upon the revocation of their banking licenses. 

Despite facing challenges such as the execution of judgments against the corporation, attachment of NDIC's assets, and difficulties in recovering debts owed by failed banks, Mr. Hassan acknowledged the remarkable achievements of NDIC and the CBN in intervening and resolving issues with problem banks. These accomplishments, he noted, included the successful liquidation of various banks, with depositors and claimants being fully settled through recovered debts and realized assets. 

He concluded by listing ongoing challenges, including the lack of specialized winding-up rules for failed financial institutions and an increase in labor law and securities-related matters from ex-staff of banks under liquidation. Nevertheless, he expressed confidence in the continued success of the CBN and NDIC in managing and resolving challenges within the financial sector.

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