NDIC threatens to withdraw insurance cover for MFBs

 Umaru Ibrahim

Nigeria Deposit Insurance Corporation has threatened to withdraw insurance cover from any microfinance bank that consistently fails to pay its premium.

The Managing Director/Chief Executive, NDIC, Umaru Ibrahim, made the threat when officials of the National Association of Microfinance Banks visited the corporation in Abuja.

He said the move might be adopted as part of punitive measures to discourage the practice whereby microfinance banks refused to pay premium.

Insurance premium is what the NDIC relies upon to settle depositors in case of bank distress.

Ibrahim said so far, N398m had been received from the sector as insurance premium, adding that about N44m was still being expected from about 100 MFBs.

He said the initiative that would have enabled the corporation to debit their accounts directly in case of default had not been accepted by majority of the operators in the sector.

Ibrahim also said the corporation, in collaboration with the law enforcement agencies, would soon begin the prosecution of fraudulent bank officials.