The Nigeria Deposit Insurance Corporation (NDIC) has announced an increase in deposit insurance coverage for all licensed deposit-taking financial institutions.
Bello Hassan, NDIC Managing Director and Chief Executive Officer (CEO), announced on Thursday during a press briefing in Abuja.
Deposit insurance is designed to protect depositors’ funds in the event of a bank failure, ensuring that depositors are reimbursed to a certain limit for their deposits in the failed bank.
Hassan stated that the increment applies to deposit money banks (DMBs), microfinance banks (MFBs), primary mortgage banks (PMBs), payment service banks (PSBs), and mobile money operators (MMOs).
He explained that the deposit insurance coverage for DMBs has been increased from N500,000 to N5 million. This revision would increase the value of DMB deposits covered by insurance from 6.31 percent to 25.37 percent of the total value of depositors’ funds.
“By increasing deposit insurance coverage, we are ensuring that depositors are better protected in the unlikely event of a bank failure,” Hassan said.
The revised coverage now protects 98.98 percent of DMB depositors, compared to the previous 89.20 percent.
Hassan further revealed that for MFBs, coverage has risen from N200,000 to N2 million, offering full coverage for 99.27 percent of depositors and significantly increasing the value of covered deposits.
Similarly, for PMBs, the maximum coverage has been raised from N500,000 to N2 million, ensuring full coverage for 99.34 percent of depositors and boosting the value of covered deposits.
Hassan also noted that PSB coverage has been increased from N500,000 to N2,000,000, providing 99.99 percent protection for depositors and raising the value of covered deposits.
The maximum pass-through deposit insurance coverage for MMOs has been raised to N5 million per subscriber per MMO, aligning it with the coverage level for DMBs.
Hassan emphasized that the revised maximum deposit insurance coverage is 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.
He assured that the NDIC is committed to ensuring the stability of the financial system.