Owing to liquidity issues which stemmed from the inability of the shareholders to inject funds, the Central Bank of Nigeria (CBN) has revoked the Licence of Garu Micro-Finance Bank in Bauchi, few weeks after the collapse of Skye Bank.
The bank has now been taken over by the Nigeria Deposit Insurance Corporation (NDIC) for its liquidation according to themanager of the bank, Ibrahim Abubakar .
“The bank had liquity problem and shareholders were unable to recapitalise it,” he said
The revocation and take over of the 20 years old bank by the banking regulators came as the microfinance bank was paying pensioners and September salaries causing pains for its customers.
“All the same the NDIC and the management are collecting forms from depositors to process their payment with designated banks across the state, to enable them receive their money,” Abubakar assured.
A senior staff of the Nigerian Deposit Insurance Corporation (NDIC), Bauchi office, who spoke on anonymity said the CBN approved the liquidation of the bank.
“The CBN has revoked the licence of Garu Micro Finance Bank Bauchi,for its inability to meet up with the financial obligations guiding operations of micro finance banks,” he said.
According to him, as soon as the NDIC officially deems that a bank has failed and is unable to meet its credit obligations, it notifies customers and the public, that it has assumed the responsibilities of receiver.
“It closes 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 post all relevant entries to the bank’s general ledger.
“This liquidation process entails more than converting assets to cash. It also involves finding new ownership for the failed bank,” he said.
He however assured that the NDIC would determine the number of depositors, their individual deposits and work out modalities for refunding their money.
Meanwhile, customers of the bank, most of them pensioners, expressed concern at the development, urging the state government and shareholders to come to their aid.
A customer and a pensioner, Bala Halliru said he came to withdraw some amount and met the bank closed.
“This embarrassment is too much; this bank has been in existence for over 25 years,” he complained .
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