NDIC Earmarks N258.76bn Insurance Cover for Bank Depositors

Umaru Ibrahim
Managing Director/Chief Executive Officer, Nigeria Deposit Insurance Corporation (NDIC), Mr. Umaru Ibrahim

James Emejo in Abuja

The Managing Director/Chief Executive,  Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, Thursday disclosed that the sum of N258.767 billion had been earmarked in its 2019 fiscal year for reimbursement of depositors in the unlikely event of closure of licenced banks.

Addressing the House of Representatives Committee on Insurance and Actuarial Matters when he appeared before it to defend the corporation’s 2019 budget estimates, he said the provision included N109.686 billion for depositors of Deposit Money Banks (DMBs), while N149.081 billion has been set aside for depositors of Primary Mortgage Banks (PMBs) and Micro Finance Banks (MFBs).

The NDIC boss noted that its proposals were consistent with the corporation’s mandate of providing financial guarantee to depositors of failed banks towards promoting public confidence in the banking sector.

This, according to him, was critical to the sustenance of the stability of the entire financial system.

Head, Communication and Public Affairs, NDIC, Mr. Mohammed Kudu Ibrahim, the MD further disclosed that a total of N140 billion was provided for DMBs while the sum of N300 million was set aside for microfinance and PMBs with respect to the issue of NDIC’s mandate of providing financial assistance to eligible licenced and insured banks.

He, therefore, urged the banks to take the opportunity to access the funds offered by the corporation whenever they are required.

The NDIC boss also explained that in fulfillment of the corporation’s mandate to provide technical assistance to licenced banks, the NDIC in collaboration with the Central Bank of Nigeria (CBN), had invested in the acquisition of a new software called the Integrated Regulatory Solution (IRS) for a more robust surveillance and supervision of insured financial institutions in the country.

According to Ibrahim, the software would enable DMBs generate real time online data among themselves and help regulators to access data online from the DMBs.

He further disclosed that the National Association of Microfinance Banks Unified Information Technology Platform (NAMBUIT) was introduced by CBN/NDIC and Association of MFBs to enhance the operational capacity of the MFBs.

He said the CBN and NDIC are financing the project in the ratio of 60/40 per cent respectively in view of the importance of the project to the growth of the MFB sub-sector.

Nonetheless, the Committee Chairman, Hon. Olufemi Fakeye, in his remarks, said the corporation has carved a niche for itself as the leading deposit insurer in Africa.

He made particular reference to the role played by the NDIC in the resolution of the defunct Skye Bank and the establishment of Polaris Bank Limited as a bridge bank and charged the corporation to be more pro-active in detecting and addressing distress in banks as a way of sustaining public confidence in the system.