NDIC pays N1.08bn to depositors of closed microfinance banks, PMBs

The Nigeria Deposit Insurance Corporation (NDIC) said it has paid N1.084 billion to 29,573 depositors of the closed Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs).

Bello Hassan, managing director/CEO, disclosed this on Thursday at the NDIC’s Special Day at the 18th Abuja International Trade Fair 2023.

He said payments are still ongoing and depositors with funds exceeding the insured limit will receive liquidation dividends after recovery of debts and sale of physical assets of the closed banks.

He said following the revocation of licenses for 179 Microfinance Banks and four Primary Mortgage Banks by the Central Bank of Nigeria (CBN), the NDIC immediately commenced liquidation of the banks and began disbursing insured sums to depositors within just seven days of the closure of these banks.

“It’s important to note that as at September 22, 2023, the Corporation had paid a cumulative insured sum of N1.084 billion naira to 29,573 depositors of the closed MFBs/MPBs,” he added.

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Hassan advised the public to be cautious of illegal fund managers, often referred to as “Wonder Banks” or “Ponzi Schemes.”

These entities he said offer high-interest rates and profits that are too good to be true, leading to devastating losses for many.

“It’s important to note that these “wonder banks” are neither licensed by the Central Bank of Nigeria nor covered by the NDIC deposit insurance scheme. Members of the public are therefore advised to patronize only banking institutions with a display of the NDIC Stickers carrying the words: “Insured by NDIC” in their banking halls or entrances and various branches across the country,” he said.

He reiterated the key mandate of the Corporation which is to provide deposit guarantee to depositors of insured financial institutions, bank supervision, distress resolution, and bank liquidation.

“Over the years, we have grown stronger in fulfilling these responsibilities and have significantly enhanced our public policy objectives of establishing a robust deposit insurance scheme in Nigeria,” the managing director said.