On Tuesday, the Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Mr Bello Hassan, revealed that the aggregate balance of various deposit insurances collected on behalf of depositors amounted to N2.207 trillion as of September 30, 2023.
Mr Hassan made this disclosure during an interactive session initiated by the House Committee on Insurance and Actuarial Matters, chaired by Hon. Ahmed Jaha.
He clarified that the maximum deposit insurance coverage currently stands at N500,000 per depositor per bank for Deposit Money Banks, Payment Service Banks, Primary Mortgage Banks, and Subscribers of Mobile Money Operators. However, in the case of Microfinance Banks, the coverage is N200,000 per depositor per bank.
“The Corporation, to date, has paid cumulatively N12.98 billion as insured deposits to depositors of 650 banks that are in liquidation. These 650 banks comprise DMBs, Primary Mortgage Banks, and Microfinance Banks.”
Mr. Hassan emphasized the importance of the liquidation process in ensuring the orderly closure of failed and insured institutions. He highlighted that the Corporation has paid liquidation dividends amounting to N103.3 billion and N1.28 billion and N4.89 billion to creditors and shareholders of banks in liquidation, respectively.
As of September 30, 2023, the NDIC has a staff strength of 1,665 operating from 11 locations and the Head office in Abuja. The Corporation provides insurance coverage to 35 deposit money banks, 32 primary mortgage banks, 712 Microfinance Banks, 5 payment service banks, and 30 mobile money schemes across the country.
Regarding the payment of insured deposits and liquidation dividends, Mr. Hassan mentioned that in May 2023, the Central Bank of Nigeria (CBN) revoked the operating licenses of 189 Microfinance Banks (MFBs) and 4 Primary Mortgage Banks. The NDIC promptly began the payment of the insured amount, having paid approximately N1.7 billion to depositors to date.
Speaking on Savannah Bank, he explained that although the apex bank initially revoked its license and handed it over to NDIC for liquidation, a court ruling challenged this action, restoring the license. Consequently, NDIC cannot pay the insured amount for a bank not in liquidation.
Mr. Hassan noted that the effective examination and onsite surveillance conducted by NDIC in collaboration with the CBN have contributed to safe and sound banking services, improved depositor confidence, and entrenched financial stability in the country’s financial system. As of the end of September 2023, the industry is judged to be safe and sound based on capital adequacy, liquidity, annex, and asset quality, all within the prudential threshold.
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