NEWS

NDIC Raises Deposit Insurance Coverage For Banks

This coverage guarantees the safety of account holders’ funds in a financial institution up to a specified limit.

By Nkiruka Aduba

The Nigeria Deposit Insurance Corporation (NDIC) has increased Maximum Deposit Insurance coverage of Deposit Money Banks (DMBs) from N500,000 to N5 million.

NDIC’s Managing Director, Bello Hassan, revealed the new coverage benchmarks at a news briefing in Abuja.

This coverage guarantees the safety of account holders’ funds in a financial institution up to a specified limit. In the event of a financial institution’s collapse or bankruptcy, this coverage guarantees reimbursement for depositors.

Hassan explained that, “The MDIC for Deposit Money Banks has been raised from N500,000 to N5m, for Microfinance Banks from N200,000 to N2m, for Primary Mortgage Banks from N500,000 to N2m, and for Mobile Money Operators subscribers’ pass-through from N500,000 to N5m per subscriber.“

He emphasised that the update aims to bolster depositor safety, public trust, the inclusivity of financial services, and the overall stability of the financial sector. “The new policy direction would provide full coverage of ninety eight per cent of the total depositors compared with the current cover of eighty nine per cent”.

“Based on these considerations, and in line with our commitment to enhancing depositors’ protection, public confidence, financial inclusion, and stability of the financial system, I am pleased to announce that the NDIC’s Interim Management Committee (IMC), during its 18th meeting held on April 24th and 25th, approved a 3 increase in the maximum deposit insurance coverage levels for all licensed deposit-taking financial institutions with immediate effect.

He further stated that the updated coverage would elevate the proportion of deposits safeguarded by deposit insurance to 25.37 percent, a substantial rise from the current coverage of 6.31 percent of the total deposit value.

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