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Thursday, 04 April 2013 00:00
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NDIC to offer financial assistance to eligible PMBs, MfBs

Alh. Umaru IbrahimThe Nigeria Deposit Insurance Corporation (NDIC) has expressed its readiness to grant financial assistance to deserving primary mortgage banks (PMBs) and microfinance banks (MFBs) as part of its efforts at repositioning the sub-sector for greater performance of the financial services system.

The NDIC Managing Director, Alh. Umaru Ibrahim made this remark in Abuja when the Board of Directors and Management of the Federal Mortgage Bank of Nigeria (FMBN) paid him a courtesy visit. Alh. Umaru disclosed that the Corporation was already developing the framework for granting the financial assistance but stressed that stringent conditions would be put in place for deserving MFBs and PMBs to comply with.

He reiterated in his warning that MFBs and PMBs that were deliberately mismanaged by their owners would not be eligible for such accommodation bill, adding that details of the novel framework would soon be made known to stakeholders once it is approved by the Board of the Corporation.

While emphasizing the strategic role of mortgage financing in the development of the financial services sector, the MD/CE stated that the Federal Ministry of Finance (FMF), Central Bank of Nigeria (CBN) and the Corporation were working on possible measures aimed at reviving the sub-sector towards achieving the transformation agenda of the Federal Government in the area of affordable housing for all taking cognisance of the huge deficit existing in the industry.

 He pointed out that some of the measures include amongst others, the CBN’s revised supervisory guidelines for primary mortgage banks, refinancing scheme in the mortgage sector and the proposed review of the land use act.

 Umaru disclosed the commencement of liquidation of seven out of the 25 PMBs recently closed by the CBN with payment of compensation to their depositors. He lamented the difficulties being encountered by the Corporation in the liquidation process as many of them merely existed as paper institutions.

He said the seven were those the Corporation could identify after frantic search at the Corporate Affairs Commission (CAC) to determine the management, board, shareholders and other details of the closed PMBs.

The NDIC boss disclosed further that it was difficult for the Corporation to determine the PMBs’ deposit liabilities due to their failure to render statutory returns to the CBN and pay mandatory premium to the NDIC. He said that the decision of the Corporation’s Board to reimburse depositors of the seven identified PMBs was part of its unwavering commitment to the protection of depositors of all licenced insured institutions.

He urged managements of PMBs to see the recent extension of deadline on the recapitalisation for primary mortgage banks by the CBN from April 31, 2013 to December, 2013 as a window of opportunity that must be well utilised. He warned that more drastic action may be taken at the expiration of the deadline.

In his remarks, the Chairman, Board of Directors, Federal Mortgage Bank of Nigeria (FMBN), Mr.  Bisi Ogunjobi stated that his institution decided to pay the courtesy visit to the NDIC to explore areas of mutual collaboration, partnership and effective information sharing between the two institutions with a view to enhancing their service delivery and improved efficiency in the primary mortgage banks towards ensuring affordable housing to Nigerians.

 He commended NDIC’s effort at sanitising the sub-sector and reiterated the need to enforce compliance with regulatory and supervisory guidelines by the operators in the mortgage industry.