By Tochukwu Bliss, Abuja
The Nigeria Deposit Insurance Corporation (NDIC), today, announced an increase in deposit insurance coverage to N5million for all licensed deposit money banks (DMBs), up from the current N500,000.
NDIC Managing Director/Chief Executive Officer (CEO), Bello Hassan, announced this at a press briefing in Abuja.
He said: “In terms of the value of deposit covered, the revised coverage would increase the value of deposits covered by deposit insurance to 25.37% compared with the current cover of 6.31% of total value of deposits.”
Reassuring of NDIC’s commitment to ensuring the stability of the financial system, he said: “By increasing deposit insurance coverage, we are ensuring that depositors are better protected in the unlikely event of a bank failure.”
Additionally, he said the increase provides coverage for 98.98% of DMB depositors — compared to the previous 89.20%.
Mr. Hassan further explained that the increment also applies to microfinance banks (MFBs), primary mortgage banks (PMBs), payment service banks (PSBs), and mobile money operators (MMOs).
By increasing deposit insurance coverage, we are ensuring that depositors are better protected in the unlikely event of a bank failure.
“MFBs coverage has risen from N200,000 to N2 million, offering full coverage for 99.27 percent of depositors (up from 98.76 percent) and significantly increasing the value of covered deposits (from 14.38 percent to 34.43 percent of total deposits),” Hassan said.
“For PMBs, the maximum coverage has been raised from N500,000 to N2 million, ensuring full coverage for 99.34% of depositors (up from 97.98%) and boosting the value of covered deposits (from 10.77% to 21.04% of total deposits).”
Similarly, PSB coverage was increased from N500,000 to N2,000,000, which provides 99.99% protection for depositors, raises the value of covered deposits to 43.10% of the total against 40.60%.
The maximum pass-through deposit insurance coverage for MMOs was jerked up to N5 million per subscriber per MMO, aligning it with the coverage level for DMBs.
Mr Hassan informed that the increases supported by a combination of existing funds, expected future funds, improved supervision, effective bank resolution frameworks, and additional funding arrangements provided by the NDIC Act.
