NDIC Mulls Hike In Deposit Insurance Coverage For Nigerians

The Nigeria Deposit Insurance Corporation (NDIC) has hinted at plans to increase maximum deposit insurance coverage payment to depositors of liquidated Deposit Money Banks (DMBs), Primary Mortgage Institutions (PMIs), and Microfinance Banks (MFBs).

Also, the corporation said it has introduced the Single Customer View (SCV) framework that has enhanced the speedy payment of insured sums.

He believes that the new coverage level once approved will go a long way in reinforcing depositors’ confidence in the NDIC’s deposit guarantee scheme.

Currently, based on the NDIC Act, the corporation guarantees payment of deposits up to the maximum insured sum of N500,000 to a depositor in DMBs and PMBs and N200,000 to a depositor in MFBs in the event of failure of a participating financial institution.

The Corporation’s Managing Director/ Chief Executive Officer Mr Bello Hassan hinted on Wednesday at a plan to review upward insurance coverage in the face of current macroeconomic developments.

Hassan spoke in Owerri, Imo state at the 20th edition of Capacity Building for Business Editors and members of the Finance Correspondents Association of Nigeria,( FICAN).

His words:” I am glad to report that our commitment in this regard has not gone without yielding the desired results. We have introduced the Single Customer View (SCV) framework that has enhanced the speedy payment of insured sums to depositors of closed banks; we have enhanced collaboration with the bar and the bench, leading to speedy dispensation of justice and more informed judgements on failed banks cases.

“We have equally put in place policy and framework on Alternative Dispute Resolution for an out-of-court settlement, which had enabled us to resolve some hitherto protracted failed bank litigations; we have reviewed the Framework for Differential Premium Assessment System (DPAS) to make it more risk-sensitive and account for significant developments that have taken place in the Nigerian banking system since its adoption in 2008.”

In the same vein, he disclosed fresh steps by NDIC to establish a special desk at the Economic and Financial Crimes Commission (EFCC) for the investigation and prosecution of parties responsible for the failure of banks.

He noted that the 20th edition of the workshop has been organized to share thoughts, knowledge and experience together with Journalists as critical stakeholders, with a view to defining a brighter and insightful future for the practice of DIS in Nigeria.

Some of the issues to be put in perspective include the adequacy of the deposit insurance coverage; developments in bank distress resolution; the role of technology in the future of deposit insurance; faster reimbursement of depositors in the event of bank failure; and of course, the roles of the media in promoting fintech in the banking system, amongst others.

Speaking further on the sidelines of the Workshop, Bello said substantial payments have been paid to over 40,000 depositors of the banks in liquidation.

Noting that more than N1.6 billion has so far been paid out, he said the amount paid out would have been more if depositors of the liquidated banks had come forward.

Hassan, while stating that the NDIC was faced with the challenge of debtors of the failed banks not wanting to pay back their loans, said: “one of the greatest challenges the NDIC is facing is debt recovery. A lot of customers of banks in liquidation that borrowed are not willing to repay those debts.