The manager of a microfinance bank in Bauchi, Microfinance Bank, Ibrahim Abubakar has announced that the operating license of the bank has been withdrawn by the Central Bank of Nigeria (CBN).
Abubakar said the bank has also been taken over by Nigeria Deposit Insurance Corporation (NDIC).
Why Garu Microfinance Bank was closed
Abubakar said the microfinance bank operations were suspended because it was facing a liquidity problem, and also because shareholders of the bank were unable to achieve recapitalisation.
A senior staff of NDIC in Bauchi office, who spoke on condition of anonymity, confirmed that the CBN approved the liquidation of the bank.
“The CBN has revoked the licence of Garu Micro Finance Bank, Bauchi, for its inability to meet up with the financial obligations guiding operations of microfinance banks.”
The staff also said the NDIC swung into action when it deemed it that bank had failed and was unable to meet its credit obligations. NDIC also notified the bank’s customers and the public that it had assumed the receiver responsibilities.
The 182 financial institutions which according to the apex bank, cut across different states of the country include 154 microfinance banks, 6 primary mortgage banks, and 22 finance companies.
CBN said 62 of the microfinance banks had already closed shops, 74 became insolvent, 12 were terminally distressed, while six voluntarily liquidated.
The CBN listed the primary mortgage banks for revocation as Accord Savings and Loans Limited in Lagos that failed to recapitalise and Ahocol Savings and Loans Limited in Anambra (State-owned) that closed shop.
Others include Trans Atlantic Savings and Loans Limited in Bayelsa (State-owned, that became insolvent), Royal Savings and Loans Limited in Delta State, Amex Savings and Loans Limited in Lagos, and Supreme Savings and Loans Limited also in Lagos.