CBN revokes licence of Bauchi-based microfinance bank

Central Bank of Nigeria, CBN
Central Bank of Nigeria (CBN)

The Central Bank of Nigeria (CBN) has revoked the operations licence of Garu Microfinance Bank.

The Bauchi-based microfinance bank was closed to the public on Monday.

A senior officer of the Nigerian Deposit Insurance Corporation (NDIC) disclosed on Tuesday in Bauchi while speaking to journalists on condition of anonymity that the CBN approved the revocation of Garu Microfinance Bank.

He added that the CBN revoked the Microfinance Bank’s licence over its inability to meet up with the financial obligations guiding operations of micro finance banks in Nigeria.

He said the NDIC as the receiver has taken over operations of the bank in order to safeguard ‎customers deposits and keep its records intact.

“It is unable to meet its credit obligations; it notifies customers and the public that it has assumed the responsibilities of receiver.

“We closed the doors to the public and immediately starts working with the bank’s staff to bring the books of account up to date and ultimately to post all relevant entries to the bank’s general ledger,” he added.

The official further informed that, when an insured bank fails, the NDIC becomes the receiver and an entity appointed to protect the bank’s accounts and other properties for orderly liquidation of the failed bank.

“This liquidation process entails more than converting assets to cash. It also involves finding new ownership for the failed bank,” he said

He assured that the NDIC would work to determine the number of depositors, their individual deposits and modalities for paying them.

Speaking on the matter, the Manager, Garu Micro Finance Bank, Mallam Ibrahim Abubakar confirmed that the bank was closed by the NDIC on Monday.

He said the microfinance bank was closed due to liquidation problem.

“The bank was closed because the shareholders of the bank have been unable to recapitalise it,” he said.

He however lamented that the liquidation came at a wrong time when the Bank is paying pensioners and September salaries.

“But the NDIC and the management are collecting forms from depositors to process their payment with designated banks across the state to enable them received their money.

According to him, the bank has been operating for over 20 years in the state capital and it has pensioners and other depositors as customers.

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