The Nigeria Deposit Insurance Corporation (NDIC) has disclosed that it has paid a cumulative sum of N12.98 billion to depositors of 650 banks that have gone into liquidation.
The NDIC Managing Director, Mr Bello Hassan, made this revelation on Tuesday during an interactive session with the House Committee on Insurance and Actuarial Matters, chaired by Hon. Ahmed Jaha.
He explained that the NDIC provides insurance coverage to various categories of deposit-taking institutions, with different maximum limits per depositor per bank.
According to him, the maximum deposit insurance coverage is N500,000 for deposit money banks, payment service banks, primary mortgage banks, and mobile money operators. For microfinance banks, the limit is N200,000 per depositor per bank.
He added that the NDIC has also paid liquidation dividends amounting to N103.3 billion, N1.28 billion, and N4.89 billion to creditors and shareholders of banks in liquidation, respectively.
Mr Hassan emphasized the importance of the liquidation process in ensuring the orderly closure of failed and insured institutions. He said that the NDIC works in collaboration with the Central Bank of Nigeria (CBN) to conduct effective examination and onsite surveillance of banks to ensure their safety and soundness.
He noted that as of September 30, 2023, the NDIC has a staff strength of 1,665 operating from 11 locations and the Head office in Abuja. He said that the aggregate balance of various deposit insurances collected on behalf of depositors amounted to N2.207 trillion as of the same date.
He also mentioned that in May 2023, the CBN revoked the operating licenses of 189 microfinance banks and four primary mortgage banks. The NDIC promptly began the payment of the insured amount, having paid approximately N1.7 billion to depositors to date.
Speaking on Savannah Bank, he explained that although the apex bank initially revoked its license and handed it over to NDIC for liquidation, a court ruling challenged this action, restoring the license. Consequently, NDIC cannot pay the insured amount for a bank not in liquidation.
The NDIC boss assured the lawmakers that the corporation is committed to fulfilling its mandate of protecting depositors and promoting financial stability in the country. He also solicited their support in enacting relevant laws and policies to enhance the performance of the NDIC.
The House Committee on Insurance and Actuarial Matters commended the NDIC for its achievements and pledged to work with the corporation to address the challenges facing the banking sector.
The NDIC is the global standard-setting body for deposit insurance systems. It was formed in 1988 to enhance the effectiveness of deposit insurance systems by promoting guidance and international cooperation. It is a member of the International Association of Deposit Insurers (IADI) and the Financial Stability Board (FSB).
The NDIC’s activities are in line with the global trends and best practices in deposit insurance, as evidenced by the 2023 IADI Annual Trends Report. The report shows that the NDIC’s coverage level, fund size, and reimbursement methods are comparable to those of other deposit insurers around the world.
The NDIC’s efforts have also contributed to the improvement of Nigeria’s ranking in the World Bank’s Ease of Doing Business Index, which measures the regulatory environment for businesses. Nigeria moved up 15 places from 146th in 2022 to 131st in 2023, out of 190 countries.
The NDIC’s achievements reflect its vision to be the best deposit insurer in the world by 2025. The corporation is poised to continue to protect the interests of depositors and foster public confidence in the banking system.
Source: Tribune Online
