By Ifeanyi Onuba, Abuja

Thursday, 2 Dec 2010

The Nigeria Deposit Insurance Corporation has said that it will begin the payment of N18.2bn trapped funds to depositors of 80 out of the 224 microfinance banks, whose licences were recently revoked by the Central Bank of Nigeria, from Monday next week.

The Acting Managing Director of the corporation, Alhaji Umaru Ibrahim, confirmed the development during a meeting with the Inspector General of Police, Mr. Hafiz Ringim, on Tuesday night in Abuja.

The apex bank had in September this year revoked the licences of 224 microfinance banks over corporate governance abuse and gross mismanagement.

The CBN had said that the audit, which was concluded in June, revealed that 224 of the MFBs, representing about 27 per cent were found to be terminally distressed and technically insolvent and had closed shop for at least six months.

However, Ibrahim noted that during the exercise, there would not be cash payment as depositors would instead be issued cheques and ATM cards for security reasons.

He said, ”Based on our laws, we are supposed to pay depositors within 90 days and that is what we have strived to achieve. We have finalised all arrangements and we hope that by next week Monday, our officials will go out and start paying the depositors of these microfinance banks.

”We need police protection and assistance to make sure that depositors and our personnel are protected. We are here to request for the same kind of cooperation and support so that by the time we commence, we will have your men on the ground.

Ibrahim also expressed the hope that the exercise would be completed before Christmas.

He said that the police protection would go a long way in encouraging depositors to come out in large numbers.

The IG assured that force would offer its cooperation and ensure maximum security at the payment centre.

 

Source: Punch