Cynthia Ezekwe
The Nigerian Deposit Insurance Corporation (NDIC) has announced plans to increase the maximum deposit insurance coverage as part of efforts to protect depositors’ funds and maintain the stability of the banking sector in the face of the evolving economic environment. The move is aimed at providing additional protection for depositors, while also supporting the development of a strong and resilient financial system.
Bello Hassan, the managing director of NDIC,made the disclosure at the 2023 Finance Correspondents and Business Editors’ Conference in Owerri, Imo state.
The NDIC MD highlighted the importance of strengthening the deposit insurance system in light of the economic challenges facing the country. He noted that the proposed increase in the coverage limit is part of a broader strategy to ensure the stability of the banking sector and protect the interests of depositors.
Currently, NDIC offers deposit insurance coverage up to a maximum of N500,000 for depositors in Deposit Money Banks (DMBs) and Primary Mortgage Banks (PMBs), and up to N200,000 for depositors in Microfinance Banks (MFBs). This means that in the event of a participating financial institution’s failure, the NDIC will cover the insured amount of deposits held in the institution. This coverage limit was established by the NDIC Act and is periodically reviewed to ensure it remains adequate to meet the needs of depositors.
Hassan announced that the NDIC has implemented the Single Customer View (SCV) framework to speed up the payment of insured sums to depositors of closed banks. Under the SCV framework, all insured financial institutions are required to provide the NDIC with a comprehensive record of all depositors and their deposit balances on a regular basis. He noted further that the NDIC has reviewed the Differential Premium Assessment System (DPAS), which was originally introduced in 2008.
In addition to the SCV framework and DPAS, Hassan disclosed that the NDIC has established a special desk at the Economic and Financial Crimes Commission (EFCC) to support the investigation and prosecution of parties responsible for the failure of banks.
“We have also enhanced collaboration with the bar and the bench, leading to speedy dispensation of justice and more informed judgments on failed banks cases; we have equally put in place policy and framework on Alternative Dispute Resolution for an out-of-court settlement, which has enabled us to resolve some hitherto protracted failed bank litigations,” he said.
According to Hassan, the NDIC has made significant progress in its liquidation activities, with the recovery of debts leading to the declaration of 100% liquidation dividends to depositors of over 20 Deposit Money Banks in liquidation. This has been achieved through the implementation of improved systems, processes, and procedures to promote transparency and accountability in the NDIC’s operations.
Hassan added that the NDIC has also made significant strides in its efforts to protect depositors’ rights and resolve complaints in a timely and efficient manner.
