NDIC to increase deposit insurance fund beyond N2trn ― MD

Nigeria Deposit Insurance Corporation (NDIC) has revealed its intention to substantially increase its deposit insurance fund beyond N2 trillion, in order to cope with any widespread systemic failure that might occur in the future.

The new Managing Director of the corporation, Mr Bello Hassan made this known on Thursday at his inauguration and that of the new Executive Director, Operations, Mr Muhammed Ibrahim by Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed.

Hassan who was Director, Banking Supervision Department of the Central Bank of Nigeria until this appointment said there need to build up depositors’ insurance fund because that is what we use in making payout in the event of any liquidation.

“If you look at it, what we have is less than N2 trillion, so there is need for us to quickly fast track the build-up of this fund in the event of any eventuality we shall have sufficient fund to be able to pay depositors without recourse to the treasury and the need to ensure that we offer assistance to insured deposit-taking institutions in a timely manner, in order to promote stability and confidence within the banking system.”

He also expressed desire for the corporation to offer assistance to insured financial institutions that need this assistance in line with its enabling legislation.

“We want to ensure that we do that in a timely manner to promote confidence and stability in the financial system.

“In line with our mandate as well, we want to ensure that there is an orderly and faster resolution of liquidated financial institutions where such licenses have been revoked by the CBN.

“If you look at 49 deposit money banks that have been liquidated, the rate of recovery was really not that significant considering that NDIC had only been able to pay 100 per cent liquidation dividend of about 10 of them.

“There is a need to enhance the power of the corporation to be able to recover debts owed to liquidated institutions.”

Earlier, Ahmed had commended NDIC for being one of the few government-owned enterprises that has been consistent in remitting its 80 percent operating surplus to the Consolidated Revenue Fund of the government among many other milestones achieved.

“Over the years, the corporation has become an important component of the nation’s financial safety net and at the forefront of activities that promote financial system stability through its contributions to financial inclusion and other economic policies of Government.

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