… As CBN liquidates 83 micro finance banks

Managing Director of the Nigeria Deposit Insurance Corporation (NDIC) Alhaji Umaru Ibrahim has said that the corporation will soon commence regulation of mobile banking in Nigeria.

Speaking during the 2014 budget defence of the agency before the Senate Committee on Banking and Currency yesterday, Ibrahim said that the non-regulation of mobile banking in Nigeria may give room for fraud in the banking or telecommunication sector.

According to him, seven banks and 11 non-banking telecommunications related institutions have been licensed to offer mobile money service by the CBN.

He said:  “There is need for regulation. The depositors of the institutions offering mobile banking needed to be identified and protected. We want to ensure that in event of any crisis, they are covered. Unless they have that assurance of being covered, you don’t expect them to accept to participate in this revolutionary project that is coming on board”.

The NDIC boss also disclosed that the CBN has approved the liquidation of 83 licensed micro finance banks because, according to him, it was discovered that some of the micro finance banks “existed only on paper while some are used to defraud Nigerians.”

He said that there were about 900 micro finance banks operating in the country.   

Ibrahim said that the NDIC was already working towards determining the number of depositors and their deposits.

The NDIC boss added that N105 billion was provided in the 2014 budget to pay off depositors of liquidated banks.

Ibrahim lamented what he called “the dollarisation’ of the economy by speculators,” assuring members of the public that the issue was already being looked into by the CBN to ensure that it does not affect the economy.

Source: Daily Trust (by Turaki A. Hassan)