The Nigerian Deposit Insurance Corporation (NDIC) is preparing to increase the maximum deposit insurance coverage to account for the effects of recent economic changes.
This was revealed by NDIC Managing Director Bello Hassan during the 2023 Finance Correspondents and Business Editors’ Conference organized by the corporation in Owerri.
Hassan stated that the new coverage amount, which he did not specify, will significantly boost depositors’ trust in the NDIC’s deposit guarantee scheme if approved.
This increase aims to safeguard depositors’ funds and maintain the stability of the Nigerian banking sector in the face of evolving economic circumstances.
Current payment of deposits
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.
Hassan said the corporation has since introduced the Single Customer View (SCV) framework that has enhanced the 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 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
Hassan noted that the Commission has 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.
Special desk at the EFCC
He added that it has established a special desk at the Economic and Financial Crimes Commission (EFCC), which is energized investigation and prosecution of parties responsible for the failure of banks.
In complementing the consumer protection efforts of the CBN, the Commission said it has enhanced public awareness of 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.
Hassan said the Commission has invigorated its liquidation activities, and greatly increased its debt recovery rate leading to the declaration of 100% liquidation dividends to depositors of over 20 deposit money banks in liquidation.
He added that it has improved its systems, processes and procedures to promote transparency and accountability in its operations, amongst other humble achievements.
He disclosed that NDIC has introduced the Single Customer View (SCV) framework that has enhanced the speedy payment of insured sums to depositors of closed banks.
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