Key Takeaways
- The NDIC is seeking Federal High Court orders to formally dissolve 89 defunct Microfinance and Primary Mortgage Banks.
- This action follows the successful transfer of assets and liabilities to new owners under the Purchase and Assumption (P&A) framework.
- The move marks the final phase of the Central Bank of Nigeria’s 2023 initiative to sanitize the nation’s financial landscape.
Finalizing the Resolution of Defunct Financial Institutions
The Nigeria Deposit Insurance Corporation (NDIC) has officially commenced the legal process to conclude the liquidation of 89 defunct Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs). This strategic move follows the successful transition of these institutions under the Purchase and Assumption (P&A) framework, a process initiated after the Central Bank of Nigeria (CBN) revoked their operating licenses in May 2023.
Ensuring Financial Stability and Continuity
The liquidation process is the final step in a broader effort to sanitize the Nigerian financial system. In May 2023, the apex bank shuttered 179 microfinance banks and four primary mortgage banks to address systemic weaknesses. Through the P&A agreements, 89 of these entities were acquired by new, eligible institutions that have since resumed operations under new corporate identities. This transition was critical in safeguarding depositor funds and ensuring that banking services remained uninterrupted for customers across various states, including Lagos, Oyo, Kaduna, and the Federal Capital Territory.
The Path to Legal Dissolution
According to a statement released by Hawwau Gambo, the NDIC’s Head of Communication and Public Affairs, the Corporation is now moving to legally wind down the defunct entities. In its capacity as the official liquidator, the NDIC is filing applications across various Judicial Divisions of the Federal High Court. The objective is to secure formal orders of dissolution for the closed banks, effectively releasing the Corporation from its duties as liquidator for these specific entities.