NDIC begins payout to depositors after CBN revokes licences of 46 microfinance banks

The Nigeria Deposit Insurance Corporation (NDIC) has initiated the process of reimbursing insured deposits to customers affected by the revocation of licenses for 46 microfinance banks. The Central Bank of Nigeria (CBN) officially withdrew the operating licenses of these banks on July 1, citing various regulatory infractions.

Following the CBN's action, the NDIC has been appointed as the official liquidator for these failed institutions. In its capacity as liquidator, the NDIC has taken immediate control of the banks to commence an orderly closure process. This includes verifying claims and disbursing insured sums to eligible depositors, as mandated by the Banks and Other Financial Institutions Act (BOFIA) 2020 and the NDIC Act 2023.

The CBN stated that the affected microfinance banks no longer meet the required regulatory standards and have ceased operations. Reasons for the license revocations include insufficient assets to cover liabilities, operating without necessary approvals, prolonged inactivity, failure to commence business within the stipulated timeframe, and not maintaining the minimum required capital. The NDIC has cautioned the public against conducting any further transactions with these defunct banks and warned against tampering with the assets or records of the institutions, as such actions carry legal consequences.

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The NDIC has commenced the process of the orderly closure of the failed banks with their immediate takeover, verification and payment of insured sums to eligible depositors