NDIC reiterates commitment to protecting depositors

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The Nigeria Insurance Corporation (NDIC) has reiterated its commitment to protecting depositors, especially the most vulnerable and strengthening the financial system.

Also, the NDIC restated its core mandate, which includes providing deposit insurance to depositors of licensed banks, supervising insured financial institutions, managing distressed banks, and ensuring the orderly resolution of banks in the event of failure.

The Managing Director/Chief Executive (MD/CE) of the Nigeria Insurance Corporation, Mr. Bello Hassan stated this on Monday on the occasion of NDIC’s special day at the 19th Abuja International Trade Fair.

The MD/CE who was represented by Hajia Hauwa Gambo, an Assistant Director in the Corporate Communications department of the Corporation said, “We are committed to safeguarding Nigerians’ bank deposits from the devastating impact of bank failures. In collaboration with the Central Bank of Nigeria (CBN), we work tirelessly to ensure the stability of the banking sector, maintain compliance to banking regulations and ensure effective oversight of insured deposit-taking financial institutions”.

Mr. Hassan stated; “Our tagline, “Protecting your bank deposits,” encapsulates our mission to foster financial inclusion and stability by assuring Nigerians that their savings are secure.

“The importance of deposit insurance cannot be overstated in a financial system where confidence is essential. It acts as a safety net that reassures depositors, builds trust in the banking system, and helps to prevent bank runs during periods of uncertainty. Over the years, the NDIC has been instrumental in promoting stability by ensuring that when banks fail, depositors are promptly compensated”.

He noted that the recent closure of Heritage Bank, following the Central Bank of Nigeria’s revocation of its operating licence on June 3, 2024, underscores the crucial role of the NDIC in protecting depositors.

He said in line with the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020 and the NDIC Act 2023 the NDIC was appointed liquidator to oversee the resolution of the bank and the payment of its depositors.

“In an unprecedented achievement, the NDIC commenced payments to depositors within four days of Heritage Bank’s closure. By leveraging depositors’ Bank Verification Numbers (BVN) as a unique identifier, the Corporation was able to identify alternate accounts and credit the insured amounts of up to N5 million directly, without the need for forms or physical visits to NDIC offices. This innovative approach has enabled the payment of 84.98% of depositors with BVN linked accounts to date”.

Mr. Hassan highlighted that this prompt response, alongside the recent increase in deposit insurance coverage from N500,000 to N5 million, has significantly mitigated the impact of the bank’s failure on depositors.

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