NDIC begins payouts to depositors of 46 failed microfinance banks following CBN licence revocations, while pursuing loan recoveries and asset sales to settle uninsured deposits

The Nigeria Deposit Insurance Corporation (NDIC) has commenced the payment of insured deposits to customers of 46 failed microfinance banks (MFBs) whose operating licences were recently revoked by the Central Bank of Nigeria (CBN).

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The corporation also said it is intensifying loan recoveries and the disposal of assets belonging to the failed institutions to reimburse depositors with balances above the insured limit.

The Managing Director and Chief Executive Officer of the NDIC, Thompson Sunday, disclosed this on Wednesday during a retreat for members of the House of Representatives Committee on Insurance and Actuarial Matters in Lagos.

Speaking on the sidelines of the event, Sunday said the corporation moved quickly to begin liquidation after the CBN revoked the licences of the affected microfinance banks and appointed the NDIC as provisional liquidator.

“We’ve started paying depositors of those banks, and gradually, we intend to cover all the insured depositors,” he said.

As part of its liquidation responsibilities, the NDIC said it is recovering outstanding loans owed to the failed banks and selling their assets to generate additional funds for the settlement of uninsured deposits.

“Our function as liquidator involves paying the guaranteed sums. Thereafter, we go after those owing the institutions and ensure that available assets are sold to realise funds for settling the uninsured portions of deposits,” Sunday explained.

The NDIC begins payouts to depositors of 46 failed MFBs using an automated payment system developed in partnership with the Nigeria Inter-Bank Settlement System (NIBSS).

Under the arrangement, depositors whose Bank Verification Numbers (BVNs) are linked to accounts in other commercial banks receive their insured deposits automatically without having to submit claims, significantly reducing delays in accessing their funds.

Sunday noted that the same payment system had also improved reimbursements to customers of Heritage Bank, where approximately 700,000 depositors have already received their insured deposits following the revocation of the bank’s operating licence.

However, he said some Heritage Bank customers have yet to be located because many of the accounts originated from legacy institutions, including Enterprise Bank, Spring Bank and Guardian Express Bank, which existed before the introduction of the BVN system.

“There are depositors that we have not been able to trace, and this is an opportunity for them to come forward. Once they do, we will pay them,” he said.

He added that proceeds from debt recovery efforts and the sale of assets belonging to failed financial institutions would be used to settle depositors whose account balances exceed the maximum insured limit.

Sunday also said the ongoing recapitalisation of Nigeria’s banking sector had strengthened financial institutions, but stressed that adequate capital alone would not guarantee stability.

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According to him, effective regulatory supervision, sound corporate governance and strong risk management practices remain essential to protecting depositors and maintaining confidence in the country’s financial system.