By Prudence Ijah, Abuja.
The Nigeria Deposit Insurance Corporation (NDIC) has cleared the air over its timely liquidation intervention in Fortis Microfinance Bank which largely prevented depositors from incurring colossal loss.
The NDIC said the liquidation of Fortis MFB is on-going and the Corporation is making all necessary efforts to realize the failed MFB’s residual assets (bad loans and physical assets) so as to enable the NDIC pay depositors with funds in excess of the insured limits.
NDIC added that payment will be in form of liquidation dividends, as has been the case with many closed banks currently under liquidation.
NDIC stated that contrary to misleading reports, it adhered to statutory guidelines on the distress resolution and liquidation of Fortis Microfinance Bank (MFB) Plc. and the protection of interest of depositors.
According to a statement made available to Frontline news and signed by the Director, Communication & Publication Affairs, NDIC, Dr. Sunday Oluyemi, 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 sack 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.
The statement further highlighted more facts and figures behind the liquidation of Fortis Microfinance Bank (MFB) Plc. as follows:
“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.
“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“As soon as Fortis MFB’s operating licence was withdrawn, the NDIC in line with its mandate swiftly verified the defunct MFB’s depositors and commenced payment of the insured sums up to the maximum limit.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.
“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,” the statement said.
NDIC said, concerning complaint by a businesswoman, Mrs Uju Ohanenye, who accused the Corporation of failure to pay the balance of N222.4m out of the fixed deposit of N301 million she lodged with Fortis Microfinance Bank (MFB) Plc, the NDIC has not failed her.
It said, “under normal circumstances, the Corporation does not join issues with depositors of failed financial institutions in public for obvious reasons, but because Mrs. Ohanenye has already made the details of her reported petition public, coupled with the fact that the same report is capable of misleading millions of innocent Nigerians particularly on the scope, benefits and limitations of the Deposit Insurance System (DIS) in Nigeria, the NDIC is constrained to issue this statement.
“Mrs. Ohanenye had contacted the Corporation on several occasions where all the issues involved in the matter were painstakingly explained to her. Contrary to her insinuation and accusation that the Corporation allowed Fortis MFB’s Management to defraud customers and had been negligent in the discharge of its duties, the NDIC wishes to make the following clarifications:
“Mrs. Ohanenye approached the Fortis MFB’s IMC and was paid a total of N74,703,867.65 (Seventy-Four Million, Seven Hundred and Three Thousand, Eight Hundred and Sixty-Seven Naira, Sixty-Five Kobo Only), in two tranches of N18,000,000:00 (Eighteen Million Naira Only) and N56,703,867.65 (Fifty-Six Million, Seven Hundred and Three Thousand, Eight Hundred and Sixty-Seven Naira, Sixty-Five Kobo Only), respectively.
“While the first tranche was for the treatment of her ailing husband, the second tranche was paid from the N2 billion approved for the IMC by the CBN in order to ease the hardship experienced by depositors.
“Subsequently, Mrs. Ohanenye was paid another sum of N200,000 (Two Hundred Thousand Naira Only) which she was entitled to after the liquidation of Fortis Microfinance Bank (MFB) Plc
“It is essential for Mrs. Ohanenye and other depositors to be properly advised that microfinance banks were established to provide affordable banking services to the economically “active poor”, that is, the low income individuals and enterprises, as a way of promoting financial inclusion,” the corporation said.