NDIC Pays N2bn To Depositors Of Liquidated Fortis MFB

The Nigeria Deposit Insurance Corporation said it has so far paid the sum of N2bn to depositors of the liquidated Fortis Micro Finance Bank.

The Director, Communication and Publication Affairs, NDIC, Dr. Sunday Oluyemi confirmed the release in a statement made available to THE WHISTLER.

He said contrary to misleading reports, the NDIC has adhered to statutory guidelines on the distress resolution and liquidation of Fortis Microfinance Bank Plc and the protection of interest of depositors.

The statement said that the initial efforts by regulatory authorities involved the setting up of joint CBN/NDIC Interim Management Committee to manage the affairs of the bank towards stemming the tide of its mismanagement and also to protect the interest of its depositors.

It said the intervention by the IMC also included the payment of N2bn 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.

The Corporation said 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, it added 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 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 added.

Unfortunately, the Corporation said 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.

It added, “As soon as Fortis MFB’s operating licence was withdrawn, the NDIC in line with its mandate swiftly verified the defunct MFB’s depositors and commenced payment of the insured sums up to the maximum limit.

“It is important to state here that the liquidation of Fortis MFB is 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 NDIC assured the public that it 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 statement said 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.

It added that the depositors of the affected closed banks who filled their claims have been paid all their deposits.

Concerning complaints by a business 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 Plc, the NDIC said it has not failed her.

It added, “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 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.

“Mrs. Ohanenye approached the Fortis MFB’s IMC and was paid a total of N74,703,867.65 only, in two tranches of N18,000,000:00 and N56,703,867.65 respectively.

“While the first tranche was for the treatment of her ailing husband, the second tranche was paid from the N2bn 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 which she was entitled to after the liquidation of Fortis Microfinance Bank Plc.”

The Corporation in the statement advised Ohanenye and other depositors to be properly advised that microfinance banks were established to provide affordable banking services to the economically active poor and enterprises, as a way of promoting financial inclusion.