Jerry Dike, a depositor at Ally Microfinance Bank, was shocked to hear that the bank's license had been revoked by the Central Bank of Nigeria (CBN). However, his worries were alleviated when he received an SMS from the Nigeria Deposit Insurance Corporation (NDIC) inviting him to verify his deposits and receive the insured amount. Similar experiences were shared by other depositors, such as Obianuju Udeogu of FCT Microfinance Bank.
The CBN revoked the licenses of 179 Microfinance Banks (MFBs) and four Primary Mortgage Banks (PMBs) due to inactivity, insolvency, failure to submit returns, closure, or cessation of banking activities for more than six months. Despite the anguish caused by the revocations, the NDIC swiftly activated mechanisms to protect depositors and guarantee payment of insured sums. The NDIC, established in 1989, administers the deposit insurance system in Nigeria, ensuring the safety of depositors' funds and providing measures for distress resolution in the banking system.
The NDIC promptly initiated the verification process for depositors of the closed MFBs and PMBs, following global best practices and the guidelines of the International Association of Deposit Insurers (IADI). The corporation collaborated with the CBN, mobilized resources, and deployed teams to take control of the closed bank premises across 32 states. Extensive sensitization campaigns were carried out to inform depositors about the verification process and payment procedures.
The NDIC's response has reinforced public confidence in the banking system and highlighted the importance of the deposit insurance system as a safety net. Depositors have praised the corporation for its effective execution of its mandate and for providing relief in the face of bank closures. The NDIC has ensured that verified depositors receive their insured sums within the stipulated seven days set by IADI.
Overall, the NDIC's swift action and adherence to best practices have demonstrated its operational readiness and resilience, safeguarding the interests of depositors and minimizing the impact of bank closures.
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