The Nigeria Deposit Insurance Corporation (NDIC) on Wednesday hinted of its plans to increase maximum deposit insurance coverage payment to depositors of liquidated Deposit Money Banks (DMBs), Primary Mortgage Institutions (PMIs), and Microfinance Banks (MFBs) in furtherance of its financial system stability roles.
Similarly, the corporation disclosed that it had introduced the Single Customer View (SCV) framework that had enhanced speedy payment of insured sums to failed banks; depositors.
The Corporation’s Managing Director/ Chief Executive Officer, Mr Bello Hassan, who made these disclosures in Owerri, Imo State, in his key address at the 20th edition of annual capacity building programme for Business Editors and members of the Finance Correspondents Association of Nigeria,( FICAN), hinged the plan to review upward insurance coverage on the current macroeconomic developments in the country.
The deposit insurance expert expressed optimism that that the new coverage level once approved would go a long way in reinforcing depositors’ confidence in the NDIC’s deposit guarantee scheme.
He explained that currently, based on the NDIC Act, the corporation guarantees payment of deposits up to the maximum insured sum of N500,000 to a depositor in DMBs and PMBs and N200,000 to a depositor in MFBs in the event of failure of a participating financial institution.
Hassan clarified: “I am glad to report that our commitment in this regard has not gone without yielding the desired results. We have introduced the Single Customer View (SCV) framework that has enhanced speedy payment of insured sums to depositors of closed banks; we have enhanced collaboration with the bar and the bench, leading to speedy dispensation of justice and more informed judgements on failed banks cases.
“We have equally put in place policy and framework on Alternative Dispute Resolution for out-of-court settlement, which had enabled us to resolve some hitherto protracted failed bank litigations; we have reviewed the Framework for Differential Premium Assessment System (DPAS) to make it more risk sensitive and account for significant developments that have taken place in the Nigerian banking system since its adoption in 2008”, the NDIC boss added.
This is even as he disclosed that fresh steps were being made by the corporation to establish a special desk at the Economic and Financial Crimes Commission (EFCC) for the investigation and prosecution of parties responsible for the failure of banks.
He pointed out that the 20th edition of the workshop was organized to share thoughts, knowledge and experience together with Journalists as critical stakeholders, with a view to defining a brighter and insightful future for the practice of DIS in Nigeria.
Hassan said that some of the issues to be put in perspective included the adequacy of the deposit insurance coverage; developments in bank distress resolution; the role of technology in the future of deposit insurance; faster reimbursement of depositors in the event of bank failure; and of course, the roles of the media in promoting fintech in the banking system, amongst others.
During an interactive chat with journalists on the sidelines of the workshop, the NDIC’s chief said substantial payments had been paid to over 40,000 depositors of the banks in liquidation, with more than N1.6 billion paid out so far to insured depositors.
Noting that the amount paid out would have been more if depositors of the liquidated banks had come forward for their entitlements, Hassan identified the challenge of debtors of the failed banks not always willing to pay back their loans as one of the challenges being faced by the corporation in its efforts to recover loans for the banks
