Nigeria Deposit Insurance Corporation (NDIC), Wednesday, offered insights into why the Central Bank of Nigeria (CBN) revoked the licenses of 154 Micro Finance Banks (MFBs) and six Primary Mortgage Banks (PMBs).

Its Managing Director, Umaru Ibrahim, said the revocation became necessary due to the erosion of their capital base, poor liquidity, inept management as well as insiders’ helping themselves with loans that they never intend to pay back.

He added that the situation was further worsened by the boisterous lifestyle of the managements of the banks that remained at variance with the philosophy of micro-finance banking operations.

Represented by NDIC Controller, Kano zonal office, Bashiru Nuhu, at the 2018 Kano International Trade Fair, Ibrahim said that NDIC has commenced the verification of all the insured depositors, adding that they would soon pay the verified claims to the appropriate depositors.

He added: “From the records obtained so far, majority of the depositors, especially in the MFBs, have less than N200,000 in their accounts, which implied that NDIC will hopefully cover 100 per cent of the depositors’ funds in the affected MFBs.”

The NDIC boss further stated that to enhance the financial system’s stability in subsequent periods and to forestall the recurrence of disappointments, the corporation has embarked on public enlightenment, explaining the roles and responsibilities of customers to their banks and vice versa.

“This will essentially instill market discipline in depositors to ever be more vigilant in choosing financial institutions to bank with,” he stated.

He said stressed the need for traders, artisans and farmers to always ensure that their savings are deposited in banks or other financial institutions nearest to them to avoid loses that could result fire incidents, burglaries and other forms of crimes.

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