The NDIC Insures 98 Percent Of Bank Depositors’ Funds

According to the Nigeria Deposit Insurance Corporation (NDIC), more than 97.6% of account holders are completely covered by the N500,000 insurance limit.

Mr. Bello Hassan, managing director, and chief executive of the NDIC, made the announcement on Tuesday at the opening ceremony of the 18th edition of the workshop for business editors and the Finance Correspondents Association of Nigeria (FICAN), themed “Enduring Extreme Disruptions: Resilience & Reinvention for Banking System Stability & Deposit Insurance” in Gombe.

“In 2016, 2017, 2018, and 2019, the total number of accounts in deposit money banks stood at 83 million, 99.1 million, 112 million, and 128.4 million, respectively,” Hassan stated.

“Of these figures, the N500,000 coverage limit covered 99.4 percent, 97.6 percent, 97.5 percent, and 97.6 percent of accounts, respectively.”

These numbers imply that just about 3% of accounts/depositors are not fully covered by the current coverage restrictions. This means that in the event of a bank’s failure, the Corporation would compensate more than 97 percent of depositors.

“In addition, the coverage limits are not intended to be static, but are subject to periodic review to ensure that they are consistent with the Deposit Insurance System’s public policy objectives.”

“The Corporation successfully reviewed and increased the coverage limits from N50,000 at the time of its inception in 1989 to N200,000 in 2006 and N500,000 in 2010.”

The NDIC chief stated that it is critical to better educate depositors on the topic of coverage because the coverage limits have long been misinterpreted by stakeholders.

“In this regard, we urge the media to make Nigerian depositors aware that the NDIC’s maximum coverage limits of N500,000 per depositor per commercial, merchant, and non-interest bank, primary mortgage bank, and mobile money operator, as well as N200,000 per depositor per microfinance bank, remain the most adequate and robust in the world.”

“There are a lot of areas that I think the NDIC act needs to be amended,” he said of the revisions the organization would pursue. We are liquidators, and what occurs is that at the point of liquidation, we strive to reclaim the assets, particularly the loans and advances made by the insolvent banks.”

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