December 31, (THEWILL) — The Managing Director/Chief Executive of the Nigeria Deposit Insurance Corporation, Mr Thompson Sunday, has drawn attention to the fact that the Federal Government’s 50 per cent cost-to-income ratio policy is limiting the corporation’s ability to build a strong financial buffer to protect depositors.
A statement by the NDIC’s Head of the Communication and Public Affairs Department, Hawwau Gambo noted that the Corporation’s boss restated the corporation’s adherence to fiscal and financial regulations, including the Fiscal Responsibility Act 2007, during a courtesy visit to the Managing Director/Chief Executive of the Ministry of Finance Incorporated, Dr Armstrong Takang, in Abuja.
According to the statement, Sunday stressed that the NDIC “complies fully with statutory remittance obligations, including the payment of 20 per cent of gross earnings or 80 per cent of net surplus to the Federal Government, as applicable,” adding that the corporation also submits its financial statements ahead of statutory deadlines.
The NDIC boss said this commitment to transparency aligns with its role as a key financial safety-net agency responsible for protecting depositors and supporting confidence in the banking system.
However, he cautioned that while the corporation also complies with the Federal Government’s 50 per cent cost-to-income ratio policy, “the policy poses operational constraints.”
He explained that maintaining a robust Deposit Insurance Fund is critical to the NDIC’s ability to respond promptly and effectively to bank failures without depending on government support.
He added that international standards under the Core Principles for Effective Deposit Insurance, issued by the International Association of Deposit Insurers, require deposit insurers to maintain adequate funds for this purpose.
He said that while NDIC complies with the policy, the deductions affect NDIC’s ability to build a strong Deposit Insurance Fund, which is needed to respond effectively to bank failures.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
