October 06, (THEWILL) — The Managing Director, Nigeria Deposit Insurance Corporation (NDIC), Mr. Thompson Sunday, has said that the corporation currently provides full insurance cover for 98.98 percent of Deposit Money Banks’ total deposits.
Sunday revealed this at the NDIC Special Day of the ongoing 20th Abuja International Trade Fair, with the theme, “Sustainability: Consumption, Incentives and Taxation”.
According to him, NDIC’s commitment to ensuring financial sector stability, in collaboration with the Central Bank of Nigeria (CBN), is strategic and unconditional.
In a message read on his behalf by the Director of Performance Management, Mrs. Bimpe Akande, the MD said, “Currently, the NDIC insures depositors of Deposit Money Banks (DMBs), Mobile Money Operators and Non-Interest Banks, up to a coverage limit of five million naira. Depositors of Payment Service Banks (PSBs), Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs) are insured up to two million naira.
“This enhanced coverage ensures that approximately 98.98% of total depositors in Deposit Money Banks, 99.27% in Microfinance Banks, 99.34% in Primary Mortgage Banks, and 99.99% in Payment Service Banks are protected, reflecting NDIC’s unwavering commitment to fulfilling its mandate.”
Mr. Sunday added, “We are dedicated to protecting Nigerians’ bank. In collaboration with the Central Bank of Nigeria (CBN), we strive to maintain stability in the banking sector, enforce compliance with banking regulations, and exercise effective oversight over insured deposit-taking institutions.
“Our mission, embodied in the tagline ‘Protecting your bank deposits,’ is to promote financial inclusion and stability by reassuring Nigerians of the security of their savings.
“Significant progress has been made in protecting depositors’ funds, notably through the increase in the maximum deposit insurance coverage, which has broadened protection across various licensed banks.”
He added that the corporation had, over three decades, played a vital role in safeguarding depositors’ funds, particularly the most vulnerable, and fortifying the financial system.
The NDIC boss assured that banks’ depositors had no reason to worry about the safety of their funds, as all their claims in excess of the insured deposits.
His words: “In the event that a bank fails, depositors with account balances exceeding the insured coverage limit receive an initial payment up to the maximum insured amount.
“Their remaining balances are then paid through liquidation dividends. Liquidation dividends refer to payouts made to depositors and creditors from the proceeds generated from the sale of a failed bank’s assets and recovered debts during the liquidation process.
“These dividends are usually paid on a pro-rata basis, meaning depositors receive a proportionate share of the recovered funds relative to their outstanding balances beyond the insured limit.”
Mr. Sunday warned members of the public against patronising Ponzi schemes and other fraudulent investment platforms.
“I would like to emphasise the importance of Nigerians to remain vigilant against Ponzi schemes and other fraudulent investment platforms. Always ensure your funds are placed only in Central Bank of Nigeria licensed banks, all of which are covered by deposit insurance provided by the NDIC. This vigilance is crucial to protecting your hard-earned savings,” he said.
