The Nigerian Deposit Insurance Corporation has blacklisted about 37 Microfinance Banks for not being able to meet necessary conditions.
Chairman of NDIC, Mrs. Ronke Sokefun, said the banks were listed for closure in the first quarter of 2020.
Sokefun, who said this during a chat organised by Babalakin & Co Legal Practitioners with the theme ‘A Conversation on Deposit Insurance, Banking Supervision, Failure Resolution and Bank Liquidation in Nigeria,’ also called for a timeline for the existence of any bridge bank.
Her words, “The truth of the matter is that most of the MfBs and Primary Mortgage Banks don’t meet our conditions. As at the end of Q1, 37 MfBs were listed for closure. They could no longer pay their depositors. There was cessation of businesses and persistent non-rendition of monthly returns.”
The NDIC boss said there was clear indication of failure as during the period, PMBs had insured deposits of N112bn, but non-performing loans was N65bn.
“So, more often like I said, a lot of these MfBs and PMBs don’t meet the conditions which we set to enable us to rescue them,” Sokefun noted.
On a bridge bank, she said it was a temporary arrangement meant to acquire the assets and liabilities of a failed bank, until final resolution is achieved and to ensure stability in the financial system.
According to her, the Central Bank of Nigeria and NDIC must agree on a timeline for any bridge bank, because anything that doesn’t have time cannot be measured.
