The Nigeria Deposit Insurance Corporation (NDIC) has initiated the process to finalize the liquidation of 89 defunct Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs) that have been acquired by new owners. This development follows the successful execution of the Purchase and Assumption (P&A) resolution model, under which the Central Bank of Nigeria (CBN) licensed 89 eligible institutions to take over the assets and liabilities of the failed banks.
The affected institutions were among 179 MFBs and four PMBs whose operating licences were revoked by the CBN on May 22 and 23, 2023. Under the P&A arrangement, the new banks have since commenced operations under different names. To formally conclude the liquidation process, the NDIC, acting as liquidator, will file applications at various divisions of the Federal High Court seeking orders to dissolve the closed banks and discharge itself as liquidator.
The move aligns with provisions of the NDIC’s enabling Act and other relevant laws governing bank resolution in Nigeria. The exercise aims to ensure the proper closure of defunct institutions while safeguarding the stability of the financial system. The NDIC reiterated its commitment to protecting depositors and maintaining public confidence in the banking sector.
The defunct banks were located across several states, including Lagos, Anambra, Oyo, Kaduna, Kano, and the Federal Capital Territory. The resolution process marks a significant step in Nigeria’s efforts to strengthen its financial sector and address challenges within the microfinance and mortgage banking subsectors.
