No fewer than 525 non-performing financial institutions have been liquidated in 30 years by the Nigeria Deposit Insurance Corporation (NDIC), an agency established through Act 22 of 1988 (now NDIC Act No 16 of 2006).
NNDC which commenced operations in 1989 released a break-down of the liquidation, showing that 51 were deposit money banks (DMBs), 325 microfinance banks (MFBs) and 51 primary mortgage banks (PMBs).
The corporation also said it successfully paid all the depositors of 18 DMBs (both insured and uninsured) through efficient and diligent liquidation activities.
It however, noted that payment of depositors of Fortune International Bank, Triumph Bank and Peak Merchant Bank was suspended as at the end of 2019 due to a litigation challenging the revocation of their operating licences.
The Assistant Director, Insurance and Surveillance Department of the NDIC, Mr. John Kayode Abiodun, gave the data in a presentation at the 2020 Finance Correspondents Association of Nigeria (FICAN) forum in Abuja.
“Through efficient and diligent liquidation activities, the corporation has successfully paid in full the deposits of the customers of 18 DMBs, (both insured and uninsured) while payment to depositors of Fortune International Bank, Triumph Bank and Peak Merchant Bank was put on hold as at end of 2019 due to litigation challenging the revocation of their operating licence.
“The effectiveness of the NDIC’s efforts in failure resolution had been impaired by a number of constraints and challenges which included: delays in revocation of the licences of terminally distressed banks; depositor and creditor apathy and ignorance (delay in filing claims); recovery of debts owed the failed banks.”