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