Depositors of 20 failed banks to get N61.63bn as liquidation dividends

The depositors, creditors, and shareholders of 20 liquidated banks are expected to get about N61.63 billion as paid liquidation dividends.

A statement from the Nigeria Deposit Insurance Corporation (NDIC) on Monday, disclosed that about N45.45 billion had been paid as of July 2023.

The statement, which was signed by the NDIC’s Director of Communication and Public Affairs, Bashir Nuhu, also disclosed that the Corporation has an additional N16.18 billion in liquidation dividends to be paid to depositors, creditors, and shareholders of the 20 banks in liquidation.

According to the NDIC, the 20 banks were closed due to the revocation of their operating licenses by the Central Bank of Nigeria (CBN) between 1994 and 2018.

The statement read: “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.

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“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.”

In the event of the failure of a financial institution and the revocation of its licence by the CBN, the NDIC will reimburse eligible depositors up to the maximum insured amount of N500,000 in Deposit Money Banks (DMBs) and Primary Mortgage Banks (PMBs) and N200,000 in Microfinance Banks (MfBs).

The Corporation sells the assets of failed banks and collects debts owing to them so that depositors whose claims are greater than the maximum insured sums of N200,000 for MFBs and N500,000 for PMBs can receive liquidation dividends on a pro-rata basis.

The liquidation dividend is the amount paid to depositors by the NDIC after a bank is liquidated if the depositor’s amount exceeds the insured amounts. Payments to creditors and shareholders are made from the proceeds after all depositors have been repaid from the assets of closed financial institutions.

The statement from the NDIC further listed the closed banks to include:

“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. 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.”