NDIC Begins Final Liquidation of 89 Failed Banks in Nigeria
The Nigeria Deposit Insurance Corporation (NDIC) has commenced the final liquidation of 89 failed microfinance and primary mortgage banks across Nigeria, marking a significant step in strengthening the country’s financial system.
The affected institutions are part of a larger group of banks whose licences were revoked by the Central Bank of Nigeria (CBN) in May 2023 due to regulatory infractions, weak capital base, and insolvency issues.
According to the NDIC, the liquidation process signifies the permanent closure of the defunct banks. However, their assets and liabilities have already been transferred to new investors, with fresh banking licences issued to successor institutions now handling customer accounts and operations.
The corporation explained that the action is part of its statutory mandate to protect depositors and ensure stability in Nigeria’s banking sector. It adopted the Purchase and Assumption (P&A) model, which allows new banks to take over deposits and continue essential banking services without disruption.
Impact on Depositors
The NDIC reassured customers that their funds remain safe despite the closure of the affected banks. Depositors have been advised to continue their transactions with the new financial institutions that assumed control of the assets and liabilities.
Customers with outstanding claims or unresolved balances are encouraged to come forward with relevant documentation to facilitate timely resolution before the liquidation process is concluded.
Background to the Bank Closures
The banks currently undergoing liquidation were among several microfinance and mortgage institutions shut down following a nationwide regulatory review by the Central Bank. The move was aimed at sanitising the financial system and removing non-performing institutions.
Following the licence revocation, the NDIC was appointed as liquidator to oversee the orderly winding down of the banks, including asset recovery, debt settlement, and eventual dissolution through legal processes.
Strengthening Financial Stability
The NDIC reiterated its commitment to safeguarding depositors and maintaining confidence in the Nigerian banking system. It noted that the ongoing liquidation exercise is part of broader efforts to promote transparency, accountability, and resilience within the financial sector.
The corporation emphasised that timely resolution of failed banks is critical to sustaining economic stability and protecting the interests of millions of Nigerian depositors.
