The Nigeria Deposit Insurance Corporation (NDIC) is seeking stakeholders’ input into its recently reviewed Differential Premium Assessment System (DPAS) Framework with a view to making the document more resourceful for the nation’s sustainable economic development
The corporation’s Director, Communication and Public Affairs Department, Bashir Nuhu, on Sunday stated that the DPAS Framework was reviewed to make it more risk sensitive and account for significant developments that had taken place in the Nigeria banking system since its adoption in 2008.
He pointed out that review of the framework by the corporation was based on the need to ensure that the framework conforms to the recommendations of the International Association of Deposit Insurers (IADI) and other global best practices.
Bashir explained that now that the review had reached consultation stage, it had become imperative for the corporation to solicit input from critical stakeholders, adding that in order to get the input the exposure draft has been placed on the corporation’s website.
The spokesman, therefore, urged all stakeholders to forward their input, comments and recommendations to NDIC Director, Insurance and Surveillance Department not later than 30th June 2023.
The NDIC adopted the Differential Premium Assessment System (DPAS) in 2008 following the issuance of its framework in 2007 to differentiate premiums payable by Insured Financial Institutions based on their respective risk profile.
The adoption of the DPAS then was aimed at introducing fairness into the premium assessment process, encouraging effective risk management practices in insured institutions and applying a risk differential approach in the deposit insurance premium assessment of insured financial institutions.
Similarly, the DPAS was also introduced to enable banks in the lower risk categories to pay relatively lower premium rates, charge banks in the higher risk categories additional premium for their extra risks, incentivise regulatory compliance and mitigate moral hazard.
