NDIC strategizes to build resilience in financial system
The Nigeria Deposit Insurance Corporation (NDIC) says it will scale up Nigeria’s deposit insurance framework to promote stability of the banking system.
The Managing Director of the corporation, Hassan Bello said this in Ibadan at the 2021 Finance Correspondents Association of Nigeria, FICAN workshop.
“In the area of Deposit Insurance, as a key mandate of the Corporation, we have evolved a strategy which accentuates our existing framework…considering the importance of the optimum Funding Ratio in deposit insurance, we are developing an effective methodology for determining a realistic Target Funding Ratio for the Corporation. Additionally, we have commenced the review of our approach to the determination of premium by banks to make it more risk-based, such that, the probability of the risk crystallizing, becomes a major factor in the pricing methodology of our premium going forward”
Bello added that the Corporation has identified the need to reconsider its framework to provide realistic terms and conditions that will enable qualifying insured financial institution promptly access technical and or financial support, in line with S.(2)(1)(b) of the NDIC Act, whilst also protecting the Corporation from possible downside risks.
He explained that the cooperation is collaborating with relevant stakeholders, to ensure that the Corporation discharges its responsibilities efficiently as well as improve on its processes in resolving liquidated financial institutions’ workshop
“This has become more important to us, giving the need to improve on our processes in resolving liquidated financial institutions. Some of the obstacles bedeviling the efficient and timely resolutions of liquidated institutions, such as slow recovery and realization of assets, as well as litigation by erstwhile shareholders and creditors of closed banks can only be addressed through effective collaboration,” he said.
The theme for this year’s workshop is “Enduring Extreme Disruptions: Resilience & Reinvention for Banking System Stability & Deposit Insurance”