As an important player in the nation’s financial system, the Nigeria Deposit Insurance Corporation (NDIC) has pledged to work more closely with the Central Bank of Nigeria (CBN) to conduct effective supervision of banks with a view to ensuring safety of depositors’ money.
Its Managing Director/Chief Executive, Alhaji Umaru Ibrahim, who stated this at the just-concluded Lagos International Trade Fair (LAIF), was given a pat on the back for making the Corporation tackle emerging challenges in the banking sector.
Ibrahim, who was represented by his Director, Special Insured Institutions Department, Mr Joshua Etopidiok, assured the nation that “in the coming years, the NDIC will continue to work with the CBN to ensure effective supervision, adherence to prudential guidelines and Code of Corporate Governance for banks to ensure their safety and the overall stability of the Nigerian financial system.”
Praising the Lagos Chamber of Commerce and Industry(LCCI) for choosing ‘Connecting Businesses, Creating Value’ as the theme of the Trade Fair, Ibrahim threw his weight behind LCCI , saying the theme resonated well with the participants.
He added: “NDIC supports the growth of businesses through the robust supervision of insured deposit-taking financial institutions in Nigeria. Therefore, NDIC is always ready and willing to partner with LCCI.As a member of the Nigerian Financial Safety net, crucial public policy objective of the Corporation is the protection of depositors of insured financial institutions as well as promoting public confidence in the financial system.The objectives are from the NDIC’s core mandate of deposit guarantee, bank supervision, distress resolution and bank liquidation. As part of its mandate, NDIC in partnership with CBN jointly conducts risk-based supervision of banks to ensure early identifification and timely intervention in potentially troubled banks.”
Disclosing the compensation mechanism for customers of failed banks, he said: “As provided for in the NDIC Act 2006, when insured financial institutions fail, depositors of Deposit Money Banks (DMBs), Non-Interest Banks (NIB) and Primary Mortgage Banks (PMBs) are reimbursed up to a maximum limit of N500,000, while the maximum insured coverage for depositors of Microfmance Bank (MFBs) is N200,000.
“However, the insured limits are periodically reviewed by the Board of the Corporation to ensure that majority of depositors are covered. One of the most significant achievements of the corporation is the provision of the deposit insurance coverage to subscribers of Mobile Money Operators to the maximum limit of N500,000 through the pass-through deposit insurance framework.
“As it stands, the number of licensed MMOs by the Central Bank of Nigeria is 23, with eight being bank-led and the remaining 15 non-bank-led. As of 30th June, 2019, the number of subscribers to the MMOs stood at 9,249,265.”
Earlier, in his welcome address, the LCCI President, Babatunde Ruwase conveyed the chamber’s commendation to NDIC for deepening public confidence and promoting stability in the banking industry.