By NKIRUKA NNOROM
The Nigerian Deposit Insurance Corporation (NDIC) has said that it has launched investigation into the N7 billion owed the 103 distressed Micro-Finance Banks (MFBs) by their various directors and other managers will bring the full weight of the law to bear on anybody found to be owing them.

The Managing Director, Alhaji Umaru Ibrahim, who made the disclosure in a media parley, Friday, in Lagos, said it was part of the agency’s efforts of riding the financial system of fraudulent practices, arguing that the country’s dream of having a wholesome banking industry would elude her if perpetrators of financial crimes are allowed to walk away free.

“As you are aware, in October 2010, the CBN in collaboration, of course, with the NDIC withdrew the licences of 103 Micro-Finance Banks who has ended up cheating and defrauding depositors as part of exercise to sanitise and get rid of distressed ones.

“The crucial thing is that we are trying to bring to book the directors, employees and any other player of the Micro-Finance Banks that contributed to the downfall of the MFBs. This is where some insiders- directors, managers, employees- abused their positions by regularly taking loans without repaying them. These are the kind of cases we refer to the Financial and Malpractices Investigation Unit, FMIU,” he explained.

Ibrahim further disclosed that the agency has paid N3 billion out of N5 billion owed insured depositors of the distressed MFBs.

He explained that the agency partnered with agent banks of the MFBs concerned in settling the depositors after selling off some assets of the affected banks in order to get money to offset the debts.

“What we did was that we made public announcement nationwide through the media and called on depositors of the Micro-Finance Banks to fill their names with the agent banks. We were involved in the verification exercise and payment at the initial stage, but we later withdrew and left the assignment to the agent banks.”

He noted that the NDIC would in the course of the year conduct on sight inspection of 250 MFBs in the country.

He posited that the country cannot achieve the dream of having a wholesome financial system if individuals that defraud the banking system are allowed to walk away free.

Earlier in his welcome address, the Commissioner of Police of the Special fraud Unit, NDIC, Mr.Tunde Ogunsakin, pledged to ensure that all cases of fraud brought before it by the NDIC, especially as regard the MFBs, were thoroughly investigated and all defaulters brought to book.

“On the Micro-Finance banks the MD talked about, I want to assure you that we will do everything possible to ensure that all cases brought before the SFU are well investigated. We are already putting measures to that effect,” he assured.

“The Special Fraud Unit is going to be proactive in trying to detect crime before the damage is done with the gracious approval of the inspector-General of Police. An intelligent section is being set up to support on-going investigation to reinforce strategic decisions and will be used for basis for initiating a criminal investigation as unravelling major fraud involves thorough investigation which will intelligence will aid,” he further assured.

Speaking further, he said, “you will never stop all crime before it happened but you can potentially stop crime earlier if we can intervene earlier, we can certainly reduce the impact of losses, particularly, the financial issues.”