Deposit Regulatory Framework Boosts Confidence in Financial System – NDIC

Elizabeth Christopher, Salamatu Ejembi

On Nov 29, 2023

The Nigeria Deposit Insurance Corporation says its regulatory framework 2021 –2025 Strategic Plan has helped in achieving its mandate and boosted confidence in the financial system.

The Managing Director, of NDIC, Mr. Bello Hassan said this at the opening ceremony of the ongoing 2023 NDIC FICAN Workshop in Owerri, the Imo State capital.

Bello said that the strategy has helped the Corporation to provide timely support to insured institutions as well as assist the monetary authority in promoting the stability of the banking system.

“It may interest you to note that, in order to deliver on this, which is in harmony with the vision of the Corporation: “To be one of the best deposit insurers in the world”, we launched the 2021 – 2025 Strategic Plan, which was formulated in consideration of current realities and trends, as well as the desire to differentiate the NDIC by providing excellent and efficient services to our stakeholders across board.

“I am glad to report that our commitment in this regard has not gone without yielding the desired results. We have introduced the Single Customer View (SCV) framework that has enhanced speedy payment of insured sums to depositors of closed banks;

“We have enhanced collaboration with the bar and the bench, leading to speedy dispensation of justice and more informed judgements on failed banks cases;

“We have equally put in place policy and framework on Alternative Dispute Resolution for out-of-court settlement, which had enabled us to resolve some hitherto protracted failed bank litigations;

“We have reviewed the Framework for Differential Premium Assessment System (DPAS) to make it more risk-sensitive and account for significant developments that have taken place in the Nigerian banking system since its adoption in 2008; and we have established a special desk at the Economic and Financial Crimes Commission (EFCC) which has energized investigation and prosecution of parties responsible for failure of banks.”

He explained that the Corporation has also reached an advanced stage in the review of the maximum deposit insurance coverage, to account for the impact of macroeconomic developments since its last review.

“It is our belief that the new coverage level once approved will go a long way in reinforcing depositors’ confidence in the NDIC’s deposit guarantee scheme.

” In complementing the consumer protection efforts of the CBN, we have enhanced public awareness of the benefits and limitations of the deposit insurance system and financial literacy, to reduce the rate at which small depositors are being defrauded, thereby enhancing confidence in the banking system;

“We have invigorated our liquidation activities, and greatly increased debt recovery rate leading to a declaration of 100 per cent liquidation dividends to depositors of over 20 deposit money banks in liquidation; and we have also improved our systems, processes and procedures to promote transparency and accountability in our operations, amongst other humble achievements.

“The NDIC boss noted that the awards and recognitions received over the years from various organisations bear eloquent testimonies to the irrevocable commitment of the current Management Team of the NDIC and the staff, to bringing about a paradigm shift in the discharge of the Corporation’s mandate.”

Mr. Bello during the welcome ceremony at the ongoing 3-day conference, said he hopes that discussions at this forum would go a long way to strengthen the commission’s resolve, for a more robust implementation of the deposit insurance system in Nigeria, to complement the Central Bank’s efforts in strengthening the safety, soundness and stability of the financial system.