Nigeria’s Deposit Insurance Corporation (NDIC) has issued a warning to bank depositors about the dangers of Ponzi schemes.
Mr. Bello Hassan, the NDIC’s Managing Director, revealed this information.
According to a press release from the fair’s organizers, he made the announcement while speaking at the Abuja International Trade Fair now taking place.
“I would also like to serve a word of caution against patronizing unscrupulous services of Ponzi schemes and illegal fund managers, otherwise known as ‘wonder banks,’ who pose as deposit-taking institutions to defraud the public of their hard-earned funds,” said the NDIC MD, who was represented by the Head of Public Affairs, Mr. Bashir Nuhu.
“They entice their victims with excessively high profits only to disappear with their money. The CBN does not have a deposit-taking institution license for these organizations, hence they are not protected by deposit insurance.”
NDIC-licensed operators were rare in Ponzi scheme operations, and thus put investors’ money at risk. MD warned that there was a very high possibility of depositors losing their money.
N500,000 for deposit money banks and N200,000 for microfinance bank customers are the new protected deposit limits, according to him. A public awareness campaign was underway, he said, and therefore the NDIC would be at the Trade Show.
As he put it, “We exhibit at all of the nation’s major trade shows, not to sell goods but to promote our services.”
“We educate the public on the dangers of not using a bank to deposit their money and instill good banking habits.”
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