In a surprising turn of events, the Central Bank of Nigeria (CBN) has unleashed its power, revoking the operational licenses of a whopping 132 Microfinance Banks (MFBs), Primary Mortgage Banks (PMBs), and even a few finance companies. The Nigeria Deposit Insurance Corporation (NDIC) steps in to calm depositors, promising swift payment of their insured sums.
Banking Blunders and License Loss
The CBN’s circular, displayed proudly on their website, reveals the reasons behind the license revocations. It seems that these banks failed to engage in the business they were licensed for in Nigeria for a continuous six-month period. Oh, the audacity! In addition, some banks didn’t meet the regulatory conditions for operating as commercial banks, directly violating the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5. Naughty, naughty!
Governor Emefiele Strikes Back
Governor Godwin Emefiele flexed his regulatory muscles, wielding the powers granted to the CBN under Section 12 of BOFIA 2020, Act No. 5. With a swift stroke of his pen, he axed the licenses of the misbehaving banks. The likes of HL Invest & Trust Limited, TFS Finance Limited, and Treasures & Trust Limited felt the weight of his wrath.
Prepare for the list of microfinance banks caught in the crossfire: Bluewhales Microfinance Bank, Igangan Microfinance Bank, Mainsail Microfinance Bank, Everest Microfinance Bank, Merit Microfinance Bank, Musharaka Microfinance Bank, Nopov Microfinance Bank, and the list goes on. Oh, the misfortune!
Primary Mortgage Banks also faced the guillotine, including Resort Savings & Loans, Safetrust Mortgage Bank, Adamawa Savings & Loans, and Kogi Savings & Loans. Their mortgage dreams have been shattered!
Deposit Insurer to the Rescue
Amidst the chaos, Mr. Bello Hassan, the managing director and chief executive of the NDIC, emerges as the hero. He assures worried depositors that the insured sums will be promptly paid. Eligible depositors are advised to gather the necessary documents—proof of account ownership, verifiable identification, and an alternate bank account—to facilitate the verification and payment process.
Limits and Liquidation
Mr. Hassan reveals that the maximum specified limits for the MFB and PMB sub-sectors are N200,000.00 and N500,000.00 per depositor per bank, respectively. As the liquidator, the NDIC is gearing up to sell off assets of the defunct banks and recover owed debts to provide liquidation dividends to affected depositors. It’s a wild financial rodeo!
Banking System Safety First
Rest assured, dear public, the regulatory authorities are working diligently to ensure the banking system remains sound. Panic not, for the safety of your bank deposits is being fiercely guarded.
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