The Nigeria Deposit Insurance Corporation (NDIC) has changed its role from primarily paying claims after bank failures to becoming a "risk minimiser". This shift in strategy aims to identify vulnerabilities early and prevent banking problems from escalating into systemic crises. NDIC Managing Director/Chief Executive, Thompson Oludare Sunday, announced this change at the Corporation's Special Day during the 21st Abuja International Trade Fair.
According to Sunday, the NDIC has strengthened its institutional framework in line with global best practices to ensure Nigeria's banking system remains safe, sound, and resilient. The Corporation has deployed Risk-Based Supervision, an enhanced Differential Premium Assessment System, and the Single Customer View Framework. A full Distress Resolution suite and the Bank Liquidation Management System have also been implemented.
The NDIC has also enhanced its collaboration with other financial safety-net architecture members, particularly the Central Bank of Nigeria (CBN). Sunday emphasized that the Corporation's mandate of deposit guarantee, bank supervision, failure resolution, and bank liquidation remains critical to maintaining confidence in the financial system. Every thriving business needs a trusted financial system capable of safeguarding working capital and facilitating payments.
The NDIC has strengthened depositor protection by increasing the maximum insured deposit limit to N5 million per depositor per Deposit Money Bank and Mobile Money Operator in 2024. For Microfinance Banks, Primary Mortgage Banks, and Payment Service Banks, the limit was raised to N2 million per depositor per institution. This enhanced coverage provides full protection for more than 98 percent of depositors across insured institutions.
For depositors whose balances exceed the insured limits, the NDIC will continue to pay liquidation dividends from recoveries made through debts owed to failed institutions and the disposal of their physical assets. The Corporation is transforming the reimbursement process through technology, including the deployment of BVN, Single Customer View, NIBSS infrastructure, and other digital solutions.
Verified depositors of failed banks can now receive their insured deposits within days of a bank's closure. Sunday urged Nigerians to keep their money with licensed and regulated financial institutions, warning against entrusting savings to unlicensed fund managers and schemes offering extraordinary or unrealistic returns. The NDIC chief highlighted the Corporation's upgraded website, launched on September 19.
The upgraded website provides information on enhanced deposit insurance coverage, automated claims-processing features, and a directory for checking institutions insured by the NDIC. Sunday stressed that technology and regulation alone cannot guarantee financial security, describing financial literacy as the first line of defence for depositors and business owners. He encouraged businesses and members of the public to strengthen their financial literacy and use digital financial services responsibly.
Key points
- The NDIC has shifted its focus from primarily paying claims after bank failures to becoming a "risk minimiser" to prevent banking problems from escalating into systemic crises.
- The Corporation has strengthened its institutional framework and enhanced collaboration with other financial safety-net architecture members.
- The NDIC has increased the maximum insured deposit limit to N5 million per depositor per Deposit Money Bank and Mobile Money Operator in 2024.
