The Nigeria Deposit Insurance Corporation (NDIC) has officially commenced the liquidation of 46 microfinance banks whose operating licences were revoked by the Central Bank of Nigeria (CBN), marking the next phase in the resolution of the failed financial institutions.
NDIC Appointed Liquidator Under BOFIA and NDIC Act
In a statement issued on Wednesday, the NDIC said it had been appointed the official liquidator of the affected banks in line with Section 12(2) of the Banks and Other Financial Institutions Act (BOFIA) 2020 and Sections 55(1) and (2) of the NDIC Act 2023. The corporation explained that under Section 12(2) of BOFIA, it automatically assumes the role of liquidator once the CBN revokes a bank's operating licence, as reported by The Cable.
According to the NDIC, the provisions of the NDIC Act 2023 empower it to take over failed institutions, verify depositors' claims, pay insured deposits, recover assets and oversee the orderly liquidation of the banks. The corporation noted that the 46 affected microfinance banks are no longer authorised to carry out banking operations in Nigeria following the revocation of their licences.
Verification and Payment Process for Depositors
The NDIC stated: "The NDIC has commenced the process of the orderly closure of the failed banks with their immediate takeover, verification and payment of insured sums to eligible depositors." The agency warned members of the public against conducting any transactions with the affected banks or attempting to remove, conceal, retain or interfere with their assets, records or properties, stressing that such actions could attract legal sanctions.
The NDIC added that depositors and the general public would be kept informed of subsequent developments as the liquidation process progresses. Eligible depositors will undergo claim verification before payment of insured deposits begins.
Reasons for Licence Revocation by CBN
The liquidation follows the CBN's decision to revoke the operating licences of the 46 microfinance banks with effect from July 1, 2026, after determining that they had failed to meet regulatory requirements for continued operation. Vanguard reports that the apex bank said the action, approved by its Governor, Olayemi Cardoso, was based on one or more regulatory breaches, including insufficient assets to meet liabilities, suspension of operations without regulatory approval, prolonged inactivity and cessation of financial intermediation.
Other violations cited by the CBN include failure to commence operations within 12 months of obtaining a licence and failure to maintain the minimum capital requirement unimpaired by losses.
List of Affected Banks
Among the affected institutions are Merchant Microfinance Bank and Abia SME Microfinance Bank in Abia State, Crystabel Microfinance Bank in Bayelsa State, Winview Microfinance Bank and CASHA Microfinance Bank in the Federal Capital Territory, as well as Gold Microfinance Bank, Creditville Microfinance Bank and Entrepreneur Microfinance Bank in Lagos State.
The CBN said the licence revocations form part of ongoing efforts to strengthen the banking sector, protect depositors, maintain financial system stability and enforce compliance with banking regulations.
