The Managing Director/Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), Mr. Bello Hassan has disclosed that the review of the maximum deposit insurance coverage to account for the current impact of macroeconomic developments has reached an advanced stage.
Mr. Hassan spoke at the 20th Edition of the Workshop for Business Editors and Finance Correspondents Association of Nigeria (FICAN) on Wednesday in Owerri, the Imo State Capital.
He noted that the new coverage level once approved would go a long way in reinforcing depositors’ confidence in the NDIC’s deposit guarantee scheme.
“The Corporation has also reached an advanced stage in the review of the maximum deposit insurance coverage, to account for the impact of macroeconomic developments, since its last review. It is our belief that the new coverage level once approved will go a long way in reinforcing depositors’ confidence in the NDIC’s deposit guarantee scheme”, he said.
Recall, in August 2016, the former Minister of Finance, Mrs Kemi Adeosun approved an upward review of the NDIC’s Maximum Deposit Insurance Coverage (MDIC) from N200,000 to N500,000 per depositor for primary mortgage banks (PMBs) and the extension of differential premium assessment system (DPAS) to the PMBs.
As part of its statutory functions as a deposit insurer, Section 20 (2) of the NDIC Act 2006, empowers the Corporation’s Board to periodically review the maximum deposit insurance coverage for licensed banks and other deposit-taking financial institutions in accordance with changes in deposit structure, income levels and in line with global best practices.
The maximum deposit insurance coverage for Deposit Money Banks (DMBs) was also increased from N50,000 to N200,000 and N500,000. While the one for Microfinance Banks (MFBs) was increased from N100,000 to N200,000.
Speaking in Owerri, the NDIC boss said, in line with the vision of the Corporation: “To be one of the best deposit insurers in the world”, it launched the 2021 – 2025 Strategic Plan, which is yielding desired results.
While highlighting some of the efforts so far made, he said, “we have introduced the Single Customer View (SCV) framework that has enhanced 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, and we have established a special desk at the Economic and Financial Crimes Commission (EFCC) which has energized investigation and prosecution of parties responsible for failure of banks”, he said.
Mr. Hassan said, “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 the 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 added.
The MD said, the desire to strengthen the banks through prudential thresholds and other regulatory instruments, calls for collaboration with all relevant stakeholders in the Nigerian financial system.
“It is this background that informed the choice of this year’s FICAN Workshop theme: “Stocktaking of Deposit Insurance Practice: Assessing the Past, Evaluating the Present and Forecasting the Future”, he said.
He said, the collaboration between the Corporation and the media through the platform has not only been sustained, but has continued to be refined towards addressing the issue of capacity building in the field of Deposit Insurance System (DIS) in particular, and the financial system in general.
“Equally important is the expansion of the scope of the workshop to accommodate members of the Civil Society Organisations (CSOs) and Association of Corporate Affairs Managers of Banks (ACAMBS).
“While the CSOs were included in view of their crucial role in promoting advocacy and sensitization in support of the public awareness drive of the Corporation, the ACAMB’s involvement was aimed at strengthening the media’s interface with the banks in the interest of the depositors and the larger financial system”, he said.
