‘They were previously closed’ — NDIC denies liquidating 20 new banks

The Nigeria Deposit Insurance Corporation says it did not liquidate 20 new banks as claimed by reports on social media.

Liquidation means selling off assets and using the proceeds to pay off creditors and shareholders. This happens when a company is insolvent and is unable to pay its debts.

In a statement on Monday by Bashir Nuhu, NDIC’s director of communication and public affairs, the corporation said the 20 banks had been previously closed due to the revocation of their licences.

He said depositors, creditors, and shareholders of liquidated banks are expected to get about N61.63 billion as paid dividends.

“Contrary to the misleading headline, we would like to clarify that the 20 banks mentioned in those reports were among the banks that had been previously closed due to the revocation of their operating licenses by the Central Bank of Nigeria (CBN) between 1994 and 2018,” the statement reads.

“The general public should be aware that the NDIC has fulfilled its commitment by paying the guaranteed sums owed to depositors.

“Additionally, the Corporation has made cumulative payments of liquidation dividends totalling N45.45 billion as of July 2023, representing amounts exceeding the guaranteed sums to depositors of the 20 banks.

“In light of further recoveries from debtors of the liquidated banks, the Corporation has announced an additional N16.18 billion in liquidation dividends to be paid to depositors, creditors, and shareholders of the 20 banks in liquidation.”

NDCI urged relevant stakeholders to visit any of its offices or access the claims page on its website, to download, complete, and submit the verification form along with the prescribed supporting documents.

“The closed banks covered by this exercise include Liberty Bank, City Express Bank, Assurance Bank, Century Bank, Allied Bank, Financial Merchant Bank, Icon Merchant Bank, Progress Bank, Merchant Bank of Africa (MBA), Premier Commercial Bank, North South Bank, and Prime Merchant Bank,” NDIC said.

“Others are Commercial Trust Bank, Cooperative and Commerce Bank, Rims Merchant Bank, Pan African Bank, Fortune Bank, All States Trust Bank, Nigeria Merchant Bank, and Amicable Bank in-liquidation.

“It’s important to note that liquidation dividend represents the amount in excess of the insured sums paid by the NDIC to depositors of a closed bank.”

The amount, the commission said, is derived from recoveries made from the realisation of assets of failed financial institutions and covers payments to creditors and shareholders after the full payment to depositors of the defunct bank.