…Transition To New Ownership Completed Under CBN-Approved Framework
… Court Orders Sought To End Liquidation Process Nationwide
Daud Olatunji
The Nigeria Deposit Insurance Corporation (NDIC) has commenced the formal process of concluding the liquidation of 89 closed Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs) following their successful acquisition and transition under the Purchase and Assumption (P&A) resolution framework approved by the Central Bank of Nigeria (CBN).
The affected institutions form part of the 179 microfinance banks and four primary mortgage banks whose operating licences were revoked by the CBN on May 22 and 23, 2023, in a broad regulatory intervention aimed at strengthening and sanitising Nigeria’s financial services sector.
Under the P&A arrangement, 89 of the failed institutions were acquired by eligible investors subsequently licensed by the CBN.
The acquiring entities assumed the assets and liabilities of the defunct banks and have since commenced operations nationwide under new identities and management structures.
With the transition process completed, the NDIC said it has now moved to the final legal stage of winding up the institutions in line with its statutory mandate as liquidator.
The Corporation disclosed that it will be filing applications before various Judicial Divisions of the Federal High Court seeking orders of dissolution for the affected banks, as well as an official discharge of the NDIC as liquidator.
According to the NDIC, the court orders, when granted, will formally terminate the existence of the defunct institutions and bring closure to all outstanding liquidation responsibilities undertaken by the Corporation.
It added that the move is consistent with its enabling Act and other relevant laws governing bank resolution and liquidation in Nigeria.
The Corporation also noted that the exercise represents a major milestone in the ongoing cleanup of the banking sector, which has seen several distressed institutions either closed permanently or resolved through acquisition and restructuring under regulatory supervision.
Although the NDIC did not publish the full list of the affected institutions, it confirmed that they are spread across multiple states of the federation and have already been successfully transitioned to new operators under approved banking identities.
The ongoing court process is expected to formally conclude one of the largest resolution exercises in Nigeria’s microfinance and mortgage banking subsector in recent years.
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