NDIC Issues Fresh Warning to Customers of 46 Closed Banks After CBN Licence Revocation
- NDIC warns Nigerians against transactions with revoked microfinance banks following CBN's massive closure
- NDIC assumes role of liquidator to ensure orderly liquidation and protect depositors' interests
- Verification process for insured deposits has begun, with updates to follow for affected customers
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Nigeria Deposit Insurance Corporation (NDIC) has issued a strong warning to depositors and the general public following the revocation of the operating licences of 46 microfinance banks by the Central Bank of Nigeria (CBN).
The agency urged Nigerians to avoid carrying out any form of transaction with the affected financial institutions, stressing that the banks have ceased operations and are no longer legally permitted to offer banking services.
Source: Original
The warning comes barely a day after the CBN announced the withdrawal of the licences of the microfinance banks as part of its efforts to strengthen the country's financial system and protect depositors.
NDIC takes over as official liquidator
In a statement released after the licence revocations, the NDIC disclosed that it has officially assumed responsibility as the liquidator of the failed banks in line with the provisions of Section 12(2) of the Banks and Other Financial Institutions Act (BOFIA) 2020 and Sections 55(1) and 55(2) of the NDIC Act 2023.
According to the corporation, the affected banks no longer have the legal authority to conduct banking operations in Nigeria.
The NDIC noted that it has immediately commenced the process of taking over the institutions to facilitate an orderly liquidation and ensure that depositors receive their insured funds as quickly as possible, according to a report by Leadership.
Public advised to avoid illegal dealings
The corporation also cautioned members of the public against engaging in unauthorised dealings with any of the closed banks.
It warned that anyone attempting to remove, conceal, retain or interfere with the assets, documents or properties belonging to the failed institutions could face legal consequences.
According to the NDIC, such actions amount to violations of the law and could hinder the liquidation process designed to safeguard the interests of depositors and creditors.
Payment process for depositors begins
The NDIC said it has already begun the verification process required for the payment of insured deposits to eligible customers.
It assured depositors that further information on how to access their insured funds, submit claims and participate in the liquidation process would be communicated in due course.
The agency urged affected customers to remain calm and rely only on official updates as it works to conclude the closure process in an orderly and transparent manner.
Source: Twitter
The CBN's revocation of the licences marks one of the largest closures of microfinance banks in recent years, with regulators maintaining that the action is aimed at preserving financial stability, strengthening confidence in the banking sector and protecting the interests of depositors across the country.
CBN limits payment suspension to failed banks to days
We also highlighted facts about the Central Bank of Nigeria's recent directive that limits the suspension of payment obligations by troubled banks to a maximum of two business days.
This new rule aims to bolster confidence in Nigeria's financial system amidst ongoing challenges faced by various financial institutions.
In the wake of the CBN revoking the licences of 46 microfinance banks for significant regulatory breaches, the directive offers a crucial safety net for businesses and investors, ensuring they are not left in limbo during periods of financial distress.
Source: Legit.ng
