Liquidation of Fortis Microfinance Bank ongoing – NDIC

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The Nigeria Deposit Insurance Corporation (NDIC) has disclosed that the liquidation of Fortis Microfinance bank is still on-going and the Corporation is making all necessary efforts to realize the failed MFB’s any residual assets (bad loans and physical assets) so as to enable the NDIC pay depositors with funds in excess of the insured limits. The payment will be in form of liquidation dividends, as has been the case with many closed banks currently under liquidation.

The corporation also explained the facts and figures behind liquidation of Fortis Microfinance Bank Plc.

The Corporation said it has adhered to statutory guidelines on the distress resolution and liquidation of the bank and the protection of interest of depositors.

A statement signed by Sunday Oluyemi, director, communication and publication affairs said the initial efforts by regulatory authorities involved the setting up of joint CBN/NDIC Interim Management Committee (IMC) to manage the affairs of the bank towards stemming the tide of its mismanagement and also to protect the interest of its depositors.

The intervention by the IMC also included the payment of N2 billion released to it by the Committee of Governors of CBN to the bank’s depositors in order to ease the hardship being experienced by them.

As the fortunes of Fortis MFB Plc began to decline due to mismanagement and abysmal corporate governance practices, the CBN, in collaboration with the NDIC, took several actions to address its deteriorated financial condition.

The intervention of regulatory agencies in the resolution of the defunct Fortis MFB were in two phases. The first phase involved corrective and supervisory measures which eventually included the sacking of the Executive Management, dissolving the Board of Directors and the appointment of a joint CBN/NDIC Interim Management Committee (IMC) to temporarily manage the affairs of the MFB. One of the reasons for the setting up of the IMC, among others, was the need to protect the interests of the depositors.

The second phase involved the revocation of the operating licence of Fortis MFB by the CBN and its subsequent liquidation by the NDIC.

Unfortunately, when all the regulatory/supervisory efforts to turn around the fortunes of Fortis MFB failed to yield the desired results, the CBN was left with no other option than to revoke its operating licence in December, 2018.

As soon as Fortis MFB’s operating licence was withdrawn, the NDIC in line with its mandate swiftly verified the defunct MFB’s depositors and commenced payment of the insured sums up to the maximum limit.

“We like to assure the general public that the Corporation is intensifying efforts to ensure that the residual assets of the Fortis MFB in-liquidation are realised with a view to paying the MFB’s uninsured depositors,” the NDIC said.

It is on record that through its sustained and diligent liquidation activities, the NDIC has realized assets to pay in full the deposits of the customers of 19 banks previously liquidated. The depositors of the affected closed banks who filled their claims have been paid all their deposits.

 

 

 

 

 

 

 

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