Contrary to reports, the Nigeria Deposit Insurance Corporation has adhered to statutory guidelines on the distress resolution and liquidation of Fortis Microfinance Bank Plc and the protection of depositors’ interest, according to Financial Street checks.
The initial efforts by regulatory authorities involved the setting up of joint CBN/NDIC Interim Management Committee to manage the affairs of the bank towards stemming the tide of mismanagement and protect depositors.
According to the NDIC, the intervention by the IMC also included the payment of N2bn released to it by the Committee of Governors of CBN to the bank’s depositors to ease the hardship they experience.
NDIC noted that, as the fortunes of Fortis began to decline due to mismanagement and abysmal corporate governance practices, the CBN, in collaboration with the NDIC, took several actions to address its deteriorated financial condition.
It explained that the intervention of regulatory agencies in the resolution were in two phases. The first phase involved corrective and supervisory measures, which eventually included the sack of the Executive management, dissolving the board of directors and the appointment of the IMC to temporarily manage the affairs of the MFB.
The second phase involved the revocation of the operating licence of Fortis by CBN and its subsequent liquidation by NDIC.
“Unfortunately, when all the regulatory/supervisory efforts to turn around the fortunes of Fortis MFB failed to yield the desired results, the CBN was left with no other option than to revoke its operating licence in December 2018,” the agency stated.
As soon as Fortis’ operating licence was withdrawn, the NDIC, in line with its mandate, swiftly verified the defunct depositors and commenced payment of the insured sums up to the maximum limit.
Liquidation of Fortis is on-going and the corporation is making necessary efforts to realise the failed MFB’s residual assets (bad loans and physical assets) to enable the NDIC pay depositors with funds in excess of the insured limits.
“The payment will be in form of liquidation dividends, as has been the case with many closed banks currently under liquidation.
“We like to assure the general public that the corporation is intensifying efforts to ensure that the residual assets of the Fortis MFB in-liquidation are realised with a view to paying the MFB’s uninsured depositors,” NDIC said.
It is on record that through its sustained and diligent liquidation activities, the NDIC has realised assets to pay in full the deposits of the customers of 19 banks previously liquidated. The depositors of the affected banks who filled their claims have been paid all their deposits, it further explained.