NDIC jerks up maximum deposit insurance to N5m for commercial banks
Omeiza Bilal
The Nigerian Deposit Insurance Corporation has increased the maximum deposit insurance coverage for customers of Deposit Money Banks from N500,000 to N5,000,000 for depositors of deposit money banks (DMBs).
The Corporation added that insurance coverage for Microfinance Banks (MfBs); Primary Mortgage Banks (PMBs); Payment Service Banks (PSBs); and Subscribers of Mobile Money operators was also increased to N2 million from 200,000; N2,000,000 from N500,000; N2,000,000 from N500,000; and N5,000,000 from N500,000 respectively.
NDIC Managing Director, Bello Hassan, who announced this at the press conference on the review of the maximum deposit insurance coverage level, Thursday in Abuja, said the Corporation told the decision as part of commitment to enhance depositors’ protection, public confidence, financial inclusion and stability of the financial system.
According to the Managing Director, the increase in the amount would provide full coverage of 98.98% of the total depositors compared with the current cover of 89.20%.
He said: “In terms of the value of deposit covered, the revised coverage would increase the value of deposits covered by deposit insurance to 25.37% compared with the current cover of 6.31% of total value of deposits.”
“Microfinance Banks (MfBs): The increase of the maximum deposit insurance coverage from N200,000 to N2,000,000, would provide full coverage of 99.27% of the total depositors compared with the current level of 98.76% and would increase the value of deposits covered by deposit insurance to 34.43% compared with 14.38% of total value of deposit, currently covered.
“Primary mortgage banks (PMBs): the increase of the maximum deposit insurance coverage from n500,000 to n2,000,000 would provide full coverage of 99.34% of the total depositors compared with the current 97.98% and would increase the value of deposits covered by deposit insurance to 21.04% compared with 10.77% of total value of deposit, currently covered.
“Payment service banks (PSBs): The increase of the maximum deposit insurance coverage from N500,000 to N2,000,000 would provide full coverage of 99.99% of the total number of depositors and would increase the value of deposits covered by deposit insurance to 43.10% of the total value deposits from the current cover of 40.60%.
“Subscribers of mobile money operators: the increase of the maximum pass-through deposit insurance coverage from N500,000 to N5,000,000 per subscriber per MMO as the applicable coverage level for depositors of DMBs.
The NDIC boss stated that with over N2 trillion in its kitty, the Corporation is better placed to meet its obligation to depositors of failed banks.
“The adoption of the revised maximum deposit insurance coverage is supported by the corporation’s current funding, represented by the balances in the various deposit insurance funds (DIFs), expected annual premium collection, enhanced supervision that would reduce the likelihood of bank failures, effective bank resolution frameworks and other funding arrangements provided by the NDIC Act no. 33 of 2023,” he said.
The Corporation’s helmsman while allaying fears that the new maximum deposit insurance coverage would not add additional burden to banks added that the decision will support the recapitalization policy of the CBN.
He reiterated the Corporations’ commitment to protect depositors as well as contributing to the stability of the financial system urging Nigerians to always patronise licensed deposit taking institutions for the safety of their deposits.
“These adjustments to the maximum deposit insurance coverage reflect our dedication to adapt and evolve in response to the changing landscape of the financial industry, and we remain steadfast in our pursuit of a secure and resilient banking environment for all,” he said.
