THE Nigeria Deposit Insurance Corporation (NDIC) has cleared the air on the possibility of reviewing upwards or downwards the premium paid by financial institutions in the country.
There have been speculations that considering the effect of Covid-19 pandemic on the banking sector, the sector’s insurer might review the premium.
But the commission last week said the funds from premium payments are usually kept for the purpose for which it was established and cannot be tampered with, adding that it is working to enhance its framework towards protecting depositors from dangers that could arise from emerging fintech solutions.
The Managing Director, NDIC, Mr Umaru Ibrahim, said this in a speech he delivered at the opening ceremony of a workshop for members of the Finance Correspondents Association of Nigeria (FICAN) and business editors in Kaduna.
At the workshop, various facilitators deliberated on ‘COVID-19 & FinTech Disruption: Opportunities and Challenges for Banking System Stability and Deposit Insurance’.
Umaru said he believes that fintech solutions are a catalyst for improving financial inclusion in Nigeria.
“The emergence of fintech is relatively new in this environment and the Central Bank of Nigeria has produced a policy guideline for the registration, licensing and supervision of fintech.
“We are also involved in that and we also partner with other regulatory authorities such as the Securities and Exchange Commission and well as the NCC.
“That is because each and every one of us has a role to play in the licensing and supervision and regulation of fintech.
“We would continue to develop and improve your knowledge and skills so that you are up to date in what is happening globally and locally in terms of the financial system so that you can help disseminate information and educate the generality of the public so that the public remains aware and protected,” he said.
Speaking further, the NDIC boss said: “There are a lot of issues around consumer protection; as you know even, without the emergence of complicated products and services and channels of financial intermediation such as biotech, even to day-to-day ordinary transactions between customers and banks.”
He added that the corporation had in recent times gotten numerous complaints and this has prompted them to further enhance their understanding of the fintech sector.
“We do have hundreds if not thousands of complaints every now and then, either about ATM-related frauds or PoS-related frauds or excessive bank charges or excessive interest charges among others.
So all of us have a responsibility to continue to sensitise and educate the millions of ordinary depositors of this country so that we can enhance and step up depositor protection awareness programmes and also continue to support the emergence of a more stable and prosperous banking system. Without the confidence of depositors and confidence of the customers, there will be no banking system.”
He further added: “Managing financial system risks requires collaboration. Financial system instability increases the volatility of asset prices and investor behaviour, leading to deteriorating credit conditions, increased costs to firms and households and potentially the collapse of the payment system.
“There is increasing evidence that fintech innovations have many advantages for businesses and customers.”
The Corporation emphasized that it is trying to identify and provide insurance cover for non-bank deposits taking institutions.
He said, “there are two main concerns for the corporation on fintech: these are how to identify and insure non-bank deposit-taking institutions licenced by the Central Bank of Nigeria and other agencies like the Securities and Exchange Commission.
“Currently, there is an ongoing engagement with the relevant regulatory agencies on how to actualise that within the limits of a legal provision.
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