The Nigeria Deposit Insurance Corporation has said its enhanced deposit insurance coverage of up to ₦5 million now provides full protection for more than 98 per cent of depositors in Deposit Money Banks and Mobile Money Operators.
The disclosure was made by NDIC Managing Director and Chief Executive Officer Thompson Oludare Sunday during the corporation’s Special Day at the 21st Abuja International Trade Fair.
The deposit insurance scheme is designed to protect depositors when an insured financial institution fails. Under the current framework, customers of Deposit Money Banks and Mobile Money Operators are insured up to ₦5 million per depositor, per institution.
Customers of Microfinance Banks, Primary Mortgage Banks and Payment Service Banks are covered up to ₦2 million.
The NDIC said the higher coverage was introduced to strengthen confidence in the financial system and protect households, small businesses and other depositors from the immediate impact of a bank failure.
The corporation also said it has modernised the process of reimbursing depositors of failed banks. Technology involving Bank Verification Numbers, the Single Customer View framework and Nigerian Inter-Bank Settlement System infrastructure is being used to make the process faster.
According to the NDIC, verified depositors can now receive their insured funds within days of a bank’s closure, compared with older manual processes that could make reimbursement more difficult.
The corporation is also repositioning itself as a “Risk Minimiser”, meaning that its role is not limited to paying depositors after a bank fails. It is also working to identify risks earlier and collaborate with other financial regulators to prevent weaknesses in financial institutions from developing into wider problems.
The development is particularly important as more Nigerians use banks and digital financial services for savings, payments, transfers and business transactions.
For small businesses, deposit protection can provide an additional layer of confidence because many SMEs depend on bank accounts to receive payments, pay workers and suppliers and manage day-to-day operations.
The NDIC said it is using risk-based supervision and other monitoring systems while working with the Central Bank of Nigeria and other financial-sector institutions.
The corporation’s latest disclosure provides information to depositors about the level of protection available to them and the systems being developed to strengthen confidence in Nigeria’s banking sector.
