The Nigeria Deposit Insurance Corporation (NDIC) has announced that its enhanced deposit insurance coverage of up to N5 million now provides full protection for more than 98 per cent of depositors in Deposit Money Banks and Mobile Money Operators. This was disclosed by the Managing Director/Chief Executive Officer of the NDIC, Thompson Oludare Sunday, at the corporation’s Special Day at the 21st Abuja International Trade Fair. The new coverage aims to strengthen confidence in the banking system.
The enhanced coverage was introduced in 2024 to protect households, small businesses, and other vulnerable depositors against the immediate financial impact of bank failures. Under the revised framework, depositors in Deposit Money Banks and Mobile Money Operators are insured up to N5 million per depositor, per institution. This move has strengthened the financial safety net for depositors as households and businesses increasingly rely on banks to safeguard savings, facilitate payments, and provide access to credit.
The NDIC has also modernized the reimbursement of depositors of failed banks through technology, including the use of Bank Verification Numbers (BVNs), the Single Customer View framework, and the Nigerian Inter-Bank Settlement System infrastructure. This has enabled verified depositors of failed banks to receive their insured deposits within days of a bank’s closure, compared to the manual processes that previously made claims reimbursement more cumbersome.
According to Sunday, the NDIC is repositioning itself as a “Risk Minimiser”, rather than merely an institution that reimburses depositors after bank failures. The corporation is increasingly focused on identifying vulnerabilities early and taking measures to prevent institutional weaknesses from escalating into wider financial-system problems. This proactive approach aims to prevent bank failures and protect depositors.
The NDIC has deployed risk-based supervision, an enhanced Differential Premium Assessment System, the Single Customer View Framework, and the Bank Liquidation Management System to minimize risks. The corporation is also strengthening collaboration with the Central Bank of Nigeria and other financial safety-net institutions to ensure a robust financial system.
The new deposit insurance coverage has different limits for various bank types. Depositors in Microfinance Banks, Primary Mortgage Banks, and Payment Service Banks are covered up to N2 million. This tiered approach ensures that the NDIC provides adequate protection for depositors across different banking institutions.
The NDIC's efforts to enhance deposit insurance coverage and modernize its processes have contributed to a more stable banking system in Nigeria. With the increased coverage and improved reimbursement processes, depositors can now have greater confidence in the banking system, knowing that their deposits are protected up to N5 million.
Key points
- The NDIC's enhanced deposit insurance coverage of up to N5 million protects 98% of bank customers.
- The new coverage was introduced in 2024 to strengthen confidence in the banking system and protect vulnerable depositors.
- The NDIC has modernized its reimbursement processes, enabling verified depositors to receive their insured deposits within days of a bank’s closure.
