NDIC Set to Prosecute Directors of Failed MFBs
- By Abimbola Tooki
- Published April 27th, 2011
- News
- Unrated
THE Nigeria Deposit Insurance Corporation (NDIC) has concluded arrangements to prosecute the directors and other officials of the closed Micro Finance Banks (MFBs). The corporation said the directors and the officials to be prosecuted were those involved in insider related abuses and is aimed at serving as a deterrent to other bank directors and officials.
The Central bank of Nigeria (CBN) last September announced the revocation of the banking licences of 224 MFBs across the country. The revocation of the licences were later reviewed which led to the discreet restoration of the licenses of 21 MFBs.
NDIC said it is now set to drag the directors and other officials of the grass roots banks to court. According to the corporation, “preliminary reports of the books and affairs of the 103 MFBs revealed that many of them were run aground by their directors and officials who engaged in insider-related abuses such as outright stealing, granting of unauthorized credits and diversion of depositors’ funds”.
Meanwhile, following the revocation of licences of 103 MFBs, NDIC is to pay N9.8billion to 731,000 depositors of 91 out of 103 closed MFBs, nationwide. While the corporation is statutorily mandated to pay N4.9 billion insured deposits, the balance of N4.9 billion uninsured deposits will be paid on realization of physical assets of and recovery of debts owed to the failed MFBs.
Out of the N4.9 billion insured deposits, the corporation has paid N1.492 billion to about 45,000 depositors of the 91 closed MFBs since the commencement of payment exercise last December. In addition, the second round payment of N2.177billion to the remaining 393,000 depositors of integrated microfinance bank is to commence next week.
The depositors of the 11 remaining MFBs will be paid as soon as their records are made available to the corporation. They include Bristol MFB, Mustason MFB, Newgate MFB, Primate MFB and South West MFB in Lagos State; Embrace MFB and Homeland MFB in Yenagoa, Bayelsa State; the rest are Cubic MFB in Benin City, Edo State; Galaxy MFB in Warri, Delta State; Gamji MFB in Birnin Kebbi, Kebbi State; and Standex MFB in Onitsha, Anambra State.
The Central bank of Nigeria (CBN) last September announced the revocation of the banking licences of 224 MFBs across the country. The revocation of the licences were later reviewed which led to the discreet restoration of the licenses of 21 MFBs.
NDIC said it is now set to drag the directors and other officials of the grass roots banks to court. According to the corporation, “preliminary reports of the books and affairs of the 103 MFBs revealed that many of them were run aground by their directors and officials who engaged in insider-related abuses such as outright stealing, granting of unauthorized credits and diversion of depositors’ funds”.
Meanwhile, following the revocation of licences of 103 MFBs, NDIC is to pay N9.8billion to 731,000 depositors of 91 out of 103 closed MFBs, nationwide. While the corporation is statutorily mandated to pay N4.9 billion insured deposits, the balance of N4.9 billion uninsured deposits will be paid on realization of physical assets of and recovery of debts owed to the failed MFBs.
Out of the N4.9 billion insured deposits, the corporation has paid N1.492 billion to about 45,000 depositors of the 91 closed MFBs since the commencement of payment exercise last December. In addition, the second round payment of N2.177billion to the remaining 393,000 depositors of integrated microfinance bank is to commence next week.
The depositors of the 11 remaining MFBs will be paid as soon as their records are made available to the corporation. They include Bristol MFB, Mustason MFB, Newgate MFB, Primate MFB and South West MFB in Lagos State; Embrace MFB and Homeland MFB in Yenagoa, Bayelsa State; the rest are Cubic MFB in Benin City, Edo State; Galaxy MFB in Warri, Delta State; Gamji MFB in Birnin Kebbi, Kebbi State; and Standex MFB in Onitsha, Anambra State.
