Alhaji Umaru Ibrahim, managing director of the Nigeria Deposit Insurance Corporation, said yesterday that the Central Bank of Nigeria has approved the liquidation of 83 licensed micro finance banks.

Ibrahim stated this when he appeared before the Senate Committee on Banking and Currency to defend his agency’s 2014 budget.

The NDIC boss said that it was discovered that some of the micro finance banks “existed only on paper while some are used to defraud Nigerians.”

He further explained that there were up to 900 micro finance banks operating in the country out of which 83 of them have been listed for liquidation.

Ibrahim said the NDIC was already working towards determining the number of depositors and how much each deposited in the banks in order to pay them.

He said, “Some assets of the banks will also be sold. There is no doubt that the operations of some of the micro finance banks have become epileptic.”

The NDIC boss added that N105 billion was provided for in the 2014 budget to pay off depositors of liquidated banks.

He said, “Funding gap is what we do to prepare for the rainy day. We hope and pray that the rainy day does not come but any insurance should prepare for the rainy day. As we speak, no bank benefited from the fund in 2013.”

Ibrahim lamented what he called “the dollarisation’ of the economy by speculators” and assured members of the public that the issue was already being looked into by the CBN to ensure that it does not affect the economy.

He also told the committee that NDIC initiated rebranding operations to ensure better service.

He said that after operating for 20 years, the NDIC had decided that it was time to rebrand for total reorientation.

He also hinted on plans to regulate mobile banking in the country to avoid any form of fraudulent practice by operators either in the banking or telecommunications sector.

He said, “In 2013, we maintained confidence and stability of the banking system through a continuous effective supervision and regulation of the system. We have also try to pay depositors of institutions that had been liquidated.

“We have stepped up awareness and campaigns about our activities to make sure that members of the public put up claims of their locked up deposits in liquidated financial institutions. We appointed some banks as agents with the assistance of our various zonal offices that we had established in various parts of the country.”

The NDIC boss added that, his plan for the current fiscal year was to continue to protect depositors’ funds and to enhance the supervision because the agency’s act did not cover such transactions at the moment.

He also pledged to promote financial literacy and ensure consumer protection so as to make sure that the agency enhances financial inclusion so that millions of Nigerians that do not have access to banks for any form of financial system or outlet were assisted in various ways.

He said, “We are partnering with the Central Bank of Nigeria to discuss the ways and means of ensuring depositors of mobile banks and depositors of mobile phone system.

“Mobile banks are emerging and seven banks had been licensed by the CBN to get involved in mobile banking and there are 11 non-banking telecommunications related institutions that had been licensed to offer mobile money service.

“This needs to be regulated. The depositors of the institutions offering mobile banking needed to be identified and protected. The whole essence of this is that if we have millions of such people sending and collecting money through mobile banking system.

“We want to ensure that in event of any crisis, they are covered. Unless they have that assurance of being covered, you don’t expect them to accept to participate in this revolutionary project that is coming on board.”