By Oluwakemi Kindness
The Nigeria Deposit Insurance Corporation has commenced the process of concluding the liquidation of 89 closed microfinance banks and primary mortgage banks following their acquisition by new owners.
In a statement on Wednesday, the Corporation says the move comes after the successful execution of the Purchase and Assumption (P&A) model, under which new institutions acquired the assets and liabilities of the defunct banks.
The affected banks are among the 179 microfinance banks and four primary mortgage banks whose licences were revoked by the Central Bank of Nigeria on May 22 and 23, 2023.
New Banks Take Over Operations
Thr NDIC said a total of 89 new institutions have since been issued licences by the CBN and are already operating under new names after taking over the failed banks.
“Through the Purchase and Assumption agreements, 89 new eligible institutions were issued licences by the CBN to acquire the assets and liabilities of the defunct banks and have since commenced operations under new names,” the statement said.
Court Process to Finalise Liquidation
To formally conclude the process, NDIC said it will approach the Federal High Court to obtain orders for the dissolution of the defunct banks.
“The NDIC… will be presenting applications to various Judicial divisions of the Federal High Court to obtain orders of dissolution for the closed banks and to release the Corporation as Liquidator,” it stated.
Part of Wider Banking Sector Clean-Up
The Corporation explained that the process is being carried out in line with its enabling Act and other relevant laws guiding bank liquidation in Nigeria.
The affected institutions span several states, including Lagos, the Federal Capital Territory, Kano, Kaduna, Rivers, Oyo and others.
