…Assures Failed Bank Depositors Of Faster Claims
The Nigeria Deposit Insurance Corporation (NDIC) has urged Nigerians to avoid investing in unregulated financial schemes to avoid falling prey to the promoters’ antics and assured bank depositors of faster claims processing and expanded insurance coverage for all licensed banks in the country.
The Managing Director/Chief Executive of the corporation, Thompson Oludare Sunday, gave the advice on Wednesday during the corporation’s special day at the 21st Abuja International Trade Fair.
According to him, the theme of this year’s Fair “Resilience: Trade, Taxation and the Economy” is both timely and strategic, and speaks directly to the realities of an economy undergoing profound transformation through bold reforms aimed at building a stronger, more resilient and productive economic structure, in line with the Federal Government’s vision of a $1 trillion economy by 2030.
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On the commission’s sustained initiatives to ensure that bank depositors’ funds are protected at all times, the NDIC boss maintained that to strengthen confidence in the banking system, the Corporation enhanced its deposit insurance coverage in 2024 with the maximum insured limit increased to N5 million per depositor per Deposit Money Bank (DMB) and Mobile Money Operator (MMO), and N2 million per depositor per Microfinance Bank (MFB), Primary Mortgage Bank (PMB) and Payment Service Bank (PSB).
He explained that this significant enhancement provided full coverage for over 98 percent of depositors across the insured institutions, thereby protecting households, small businesses and other vulnerable depositors from the immediate consequences of bank failure, adding that for depositors whose balances exceed the insured limits, the NDIC continues to pay liquidation dividends from recoveries realised through the recovery of debts owed to the failed institutions as well as the disposal of their physical assets.
Sunday clarified: “Our objective is straightforward: no depositor should lose confidence in the banking system merely because an insured institution has failed.”
He reiterated the commission’s advice to Nigerians on the need to deposit their money and do business with only licensed financial institutions, stressing that jumbo investment returns being offered by unlicensed fund managers could expose investors to financial losses.
According to him, the corporation has continued to re-set and strengthen its institutional framework in line with global best practices.
He listed some of the corporation’s initiatives aimed at strengthening its institutional framweork as including the deployment of Risk-Based Supervision (RBS), an enhanced Differential Premium Assessment System (DPAS), the Single Customer View (SCV) Framework, a full Distress Resolution suites, and the Bank Liquidation Management System (BLMS), alongside stronger inter-agency collaboration, particularly with the Central Bank of Nigeria and other members of the financial safety net architecture.
The deposit insurance expert said the proliferation and collapse of Ponzi schemes had consistently showed the financial and emotional consequences of entrusting savings to unregulated operators.
Sunday expatiated: “There are still Nigerians who keep substantial funds outside the formal banking system or entrust their savings to unlicensed fund managers, attracted by promises of extraordinary and unrealistic returns. Please note that the consequences of this can be devastating.
“The proliferation and collapse of Ponzi schemes have demonstrated, time and again, the enormous financial and emotional cost of placing hard-earned resources in unregulated schemes. If an investment promise sounds too good to be true, Nigerians should pause, ask questions and verify before committing their money”, he advised.
He also encouraged individuals and businesses to improve their financial literacy and adopt digital financial services responsibly, adding that the corporation is strengthening depositor protection through expanded insurance coverage, technology-driven reimbursement and improved oversight of insured financial institutions.
