NDIC Begins Liquidation Process for 89 Failed MFBs and PMBs

The Nigeria Deposit Insurance Corporation (NDIC) has begun the final steps to formally dissolve 89 microfinance banks and primary mortgage banks whose licences were revoked in 2023. These institutions, which operated under revoked licences, have since been acquired by new owners under the Purchase and Assumption (P&A) resolution model. In May 2023, the Central Bank of Nigeria (CBN) withdrew operating licences from 179 microfinance banks and four primary mortgage banks due to insolvency and regulatory breaches. Under the P&A arrangement, 89 eligible institutions were granted new licences to assume the assets and liabilities of the defunct banks, allowing them to resume operations under new names. To complete the legal process, the NDIC, acting as liquidator, will file applications with various divisions of the Federal High Court. These applications seek court orders to formally dissolve the closed institutions and release the NDIC from its liquidator responsibilities. The move marks the final phase of the resolution process, ensuring compliance with the NDIC’s enabling Act and other relevant laws. It also signals the end of a major banking sector clean-up aimed at restoring stability and protecting depositors in Nigeria’s financial system.