NDIC lists 37 Micro Finance Banks for closure soon

No fewer than thirty seven Micro Finance Banks, (MFBs) may soon seize to exist for not being able to meet necessary conditions.

Chairman of the Nigeria Deposit Insurance Corporation (NDIC), Mrs. Ronke Sokefun who made this known during a chat with the theme: “A Conversation on Deposit Insurance, Banking Supervision, Failure Resolution and Bank Liquidation in Nigeria,” said the banks were listed for closure in the first quarter of 2020, but

called for a timeline for the existence of any bridge bank.

Sokefun who was speaking at the event organised by Babalakin & Co Legal Practitioners, 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 explained that there was clear indication of failure during the period as 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 added.

Commenting 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.

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

Commenting also on Polaris Bank (for Skye Bank), Chairman of 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,” she pointed out.

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