The Central Bank of Nigeria (CBN) has taken a decisive step by revoking the operating licenses of 179 Microfinance Banks (MFBs) and four Primary Mortgage Banks (PMBs). The announcement was made by Mr. Godwin Emefiele, the Governor of the Central Bank of Nigeria, who cited the failure of these financial institutions to engage in their designated business activities for a continuous period of six months.
The action follows the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5, which empowers the CBN to revoke licenses of financial entities that do not comply with the conditions for granting licenses or fail to meet their obligations imposed by the apex bank.
In response to concerns over the fate of depositors, the Nigeria Deposit Insurance Corporation (NDIC) has reassured them that their insured sums will be promptly paid. The NDIC, as the deposit insurer, will undertake the verification of eligible depositors and begin the process of payment at the premises of the affected banks. Depositors are advised to gather the necessary documents, including proof of account ownership, verifiable means of identification, and an alternate bank account, to facilitate the seamless verification and payment of their insured deposits.
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The maximum insured amounts for depositors in the MFB and PMB sub-sectors are set at N200,000.00 and N500,000.00 per depositor per bank, respectively. For depositors with claims exceeding these insured sums, the NDIC, acting as the liquidator, will initiate the sale of assets of the closed banks and work towards recovering debts owed to them. The liquidation dividends will then be distributed on a pro-rata basis to these affected depositors.
Mr. Bello Hassan, the Managing Director/Chief Executive of the NDIC, assured the public that regulatory authorities are committed to maintaining the soundness of the banking system. He emphasized that there is no cause for panic regarding the safety of bank deposits. The necessary measures are being taken to ensure the stability and integrity of the banking sector.
The revocation of licenses serves as a strong message from the Central Bank of Nigeria that non-compliance and failure to meet obligations will not be tolerated. The actions taken by the CBN and the NDIC reflect the commitment to protect depositors' interests and uphold the integrity of the Nigerian financial system.
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