From Uche Usim, Owerri
The Nigerian Deposit Insurance Corporation (NDIC) says plans are at an advanced stage to review the maximum deposit insurance coverage, to reflect the impact of macroeconomic developments, since its last review.
The Managing Director of NDIC, Mr Bello Hassan, made the disclosure in Owerri at the 2023 Finance Correspondents and Business Editors’ Conference organised by the corporation.
According to him, the new coverage level, which he did not disclose, will go a long way in reinforcing depositors’ confidence in the NDIC’s deposit guarantee scheme if approved.
As a deposit insurer, the NDIC currently guarantees payment of deposits up to the maximum insured sum of N500,000 to a depositor in Depot Money Banks (DMBs) and Primary Mortgage Banks (PMBs) and N200,000 to a depositor in Microfinance Banks (MFBs) in the event of the failure of a participating financial institution.
The NDIC boss said the corporation has since introduced the Single Customer View (SCV) framework that has enhanced speedy payment of insured sums to depositors of closed banks.
“We have also 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 out-of-court settlement, which has 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; and we have established a special desk at the Economic and Financial Crimes Commission (EFCC), which is energised investigation and prosecution of parties responsible for failure of banks.
“In complementing the consumer protection efforts of the CBN, we have enhanced public awareness on the benefits and limitations of the deposit
insurance system and financial literacy, to reduce the rate at which small depositors are being defrauded, thereby enhancing confidence in the banking system; we have invigorated our liquidation activities, and greatly
increased debt recovery rate leading to declaration of 100 per cent liquidation dividends to depositors of over 20 deposit money banks in liquidation; and we have also improved our systems, processes and procedures to promote transparency and accountability in our operations, amongst other humble achievements”, he explained.
In his presentation at the event, the Director, Insurance and Surveillance Department of NDIC, Mr Abdullhameed disclosed that in the event of a bank’s liquidation, depositors are the first to be compensated while the staff of the affected bank are the last.