The Nigeria Deposit Insurance Corporation has begun paying insured deposits to customers of 46 failed microfinance banks whose operating licences were revoked by the Central Bank of Nigeria, while stepping up loan recoveries and the sale of assets to reimburse depositors with balances exceeding the insured limit.

The Managing Director and Chief Executive Officer of the NDIC, Thompson Sunday, disclosed this on Wednesday in Lagos during a retreat for members of the House of Representatives Committee on Insurance and Actuarial Matters.

Speaking on the sidelines of the event, Sunday said the corporation immediately commenced the liquidation process after the Central Bank of Nigeria revoked the operating licences of the affected microfinance banks and appointed the NDIC as provisional liquidator.

“We’ve started paying depositors of those banks, and gradually, we intend to cover all the insured depositors,” he said.

He said the NDIC is pursuing the recovery of outstanding loans and selling the assets of the failed microfinance banks to generate funds for reimbursing depositors with balances above the insured deposit threshold.

“Our function as liquidator involves paying the guaranteed sums. Thereafter, we go after those owing the institutions and ensure that available assets are sold to realise funds for settling the uninsured portions of deposits,” Sunday said.

He said the corporation had revamped its reimbursement process through a partnership with the Nigeria Inter-Bank Settlement System, enabling the automatic payment of insured deposits directly to depositors’ bank accounts using their Bank Verification Numbers.

Under the arrangement, depositors whose Bank Verification Numbers are linked to active bank accounts receive their insured deposits automatically, eliminating the need to file claims and significantly reducing payment delays.

Sunday said the same system had expedited reimbursements to depositors of Heritage Bank, with about 700,000 customers already paid since the bank’s operating licence was revoked.

He, however, noted that some Heritage Bank depositors have yet to be traced because the lender inherited customer accounts from legacy institutions, including Enterprise Bank, Spring Bank and Guardian Express Bank, many of which existed before the introduction of the BVN system.

“There are depositors that we have not been able to trace, and this is an opportunity for them to come forward. Once they do, we will pay them,” he said.

He added that funds realised from the recovery of outstanding loans and the sale of assets belonging to failed banks would be used to reimburse depositors with balances exceeding the insured deposit limit.