Stakeholders Urge Regulators to Adopt Better Ways of Managing Ailing Banks
Capital market operators on Thursday urged Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to map out strategies aimed at managing ailing banks rather than outright liquidation.
They stated this in an interview with the News Agency of Nigeria (NAN) in Lagos, while reacting to the liquidation of Fortis Microfinance Bank Plc.
The operators said that CBN and NDIC should rather manager the affairs of any distressed instead of resorting to liquidation in the interest of depositors, shareholders and economy in general.
The NDIC recently announced the official liquidation of Fortis Microfinance Bank and its branches nationwide.
The corporation in a statement posted on its official website assured insured depositors of the repayment of their monies.
“NDIC, the official Liquidator of Fortis Microfinance Bank whose license was recently revoked, has concluded arrangement to close the bank and its branches and pay the insured depositors.
“We are therefore calling all depositors of the bank to visit the bank’s branches and meet NDIC officials for the verification of their claims, commencing from February 4, till February 8, 2019,” NDIC said in a the statement.
However, commenting on the development,
Malam Garba Kurfi, the Managing Director, APT Securities and Funds Limited, said that operators expected the apex bank and NDIC to manage the affairs of Fortis Microfinance instead of liquidation.
Kurfi said that management of the bank’s affairs would have been better for the depositors and existing banks that have business relationship with Fortis.
“Liquidation will affect the existing banks that have business relationship with Fortis Microfinance Bank which can extend to others banks,” he said.
Kurfi said that appointing a new management and resale of the bank would have been better for entire economy rather than liquidation.
He, however, commended the management of the Nigerian Stock Exchange (NSE) for being proactive in suspending the bank from trading in November due to non compliance to post listing requirements.
National Chairman, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, lamented that shareholders remained the victims without any compensation.
According to him, Okezie regulators must device another means of solving the problems in the financial industry instead of aggravating it through liquidation.
He said that regulators should have taken over the bank through bail out by appointing a new management to oversee its affairs instead of resorting to liquidation.
“Our regulators must device another means of solving the problems in the financial industry rather than aggravating it most especially microfinance banks,” Okezie said.