By YINKA KOLAWOLE

Managing Director, NDIC, Alh. Umaru Ibrahim, who handed down the warning in Abuja, while receiving the management of Federal Mortgage Bank of Nigeria (FMBN) in his office, urged operators to see the extension as a window of opportunity to enable seek all possible means of attracting investors, warning that more drastic action may be taken at the expiration of the deadline.

It would be recalled that CBN recently extended the deadline for mortgage firms to shore up their shareholders’ funds by eight months from April 30 to December 31, 2013. A circular to all directors and shareholders of PMBs, signed by Director, Other Financial Institutions Supervision Department, CBN, Mr Olufemi Fabamwo, noted that the decision is “to afford all affected PMBs sufficient time to exercise any of the options for capital raising, business combination and downscaling highlighted in the earlier circular dated 14th December, 2012.

“All PMBs are once again strongly advised to conduct due diligence and seek professional advice in exercising any of the options and to conclude the processes before the new deadline in order to allow sufficient time for capital verification and necessary regulatory approvals.”

Meanwhile, NDIC has commenced the liquidation of seven out of the 25 mortgage banks recently closed by CBN with payment of compensation to their depositors. In a statement issued by the Head, Communication & Public Affairs Unit of NDIC, Alhaji H. S. Birch, the NDIC boss was said to have lamented the difficulties being encountered by the Corporation in the liquidation process as many of them merely existed as paper institutions.

“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,” he stated. Ibrahim further noted 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 deposi
tors of all licensed insured institutions.

The NDIC boss revealed that as part of the Corporation’s effort to reposition the financial sector for greater performance, it is ready to grant financial assistance to deserving PMBs as well as microfinance banks (MFBs).

He said the Corporation was already developing the framework for granting the financial assistance, stressing however that stringent conditions would be put in place for deserving MFBs and PMBs, but noted that PMBs and MFBs that were deliberately mismanaged by their owners would not be eligible for such financial assistance.

While emphasizing the strategic role of mortgage financing in the development of the financial services sector, Ibrahim stated that the Federal Ministry of Finance (FMF), CBN and NDIC 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 housing deficit existing in the country. He listed some of the measures as including 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.