NDIC Begins Final Liquidation of 89 Failed Banks

By Love Oyedokun

ABUJA — The Nigeria Deposit Insurance Corporation (NDIC) has officially commenced the final phase of its liquidation mandate for 89 defunct Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs). This decisive move marks a major milestone in the Corporation’s effort to tidy up the financial sector landscape following the mass revocation of banking licenses by the Central Bank of Nigeria (CBN) in mid-2023.

Cablenews24 reports that the affected institutions were among a total of 179 MFBs and 4 PMBs whose licenses were terminated on May 22nd and 23rd, 2023, due to regulatory non-compliance and insolvency. By moving to conclude the liquidation, the NDIC is signaling the finalization of a complex resolution process that has transitioned these failed entities into new hands.

The resolution was made possible through the “Purchase and Assumption” (P&A) model—a strategic resolution tool employed by the NDIC. Under this framework, the assets and liabilities of the defunct banks were acquired by 89 newly established and eligible financial institutions.

According to a press release signed by the Head of Communication & Public Affairs, Hawwau Gambo, these acquiring institutions have already secured new licenses from the CBN and are currently operational under their new identities. This transition ensured that depositors and creditors were protected and that financial services in the affected regions faced minimal disruption.

While the operational transition of these banks is complete, the legal entity of the “defunct” bank must still be officially dissolved to satisfy the requirements of the NDIC Act. To this end, the Corporation is set to approach various judicial divisions of the Federal High Court.

The NDIC is seeking two primary outcomes from the court:

1. Orders of Dissolution: A formal judicial declaration that the closed banks have ceased to exist as corporate entities.
2. Discharge of Liquidator: A court order officially releasing the NDIC from its duties as the appointed liquidator for these specific institutions.

For the Nigerian financial sector, this move is a significant step toward transparency and regulatory closure. By cleaning up the legal status of these 89 banks, the NDIC is ensuring that the “failed bank” status is permanently removed from the records, allowing the new owners to operate with a clean slate.

Key Highlights of the Resolution Process

This action serves as a reassurance to the public that the NDIC remains vigilant in its duty to protect depositors and maintain the integrity of the banking system. The Corporation, under its enabling Act, continues to monitor the activities of the successor institutions to ensure they maintain the stability required to serve their customers effectively.

For further information regarding the status of these institutions, stakeholders are encouraged to visit the official NDIC website at www.ndic.gov.ng.

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