Amaka Obiefuna

The Managing Director/Chief Executive of Nigeria Deposit Insurance Corporation (NDIC), Mr. Bello Hassan says “the NDIC’s maximum coverage limits of N500,000.00 per depositor per commercial, merchant and, non-interest bank, primary mortgage bank and mobile money operator, as well as N200,000.00 per depositor per microfinance bank remain the most adequate and robust in the world.”

In his keynote address at the opening ceremony of the 18^th Edition of the Workshop Of Business Editors 7 Finance Correspondents Association of Nigeria (FICAN) held yesterday at Gombe International Hotel, Gombe, Hassan said “participants at the Ibadan workshop had been very critical that the coverage limits are not only small but required an urgent upward review in order to engender stronger public confidence in the banking system.

 Nonetheless, I need to reiterate that, as it is today, these limits are not only adequate, they are also consistent with the extant provisions and recommendations of the International Association of Deposit Insurers (IADI) in its Core Principle for Effective Deposit Insurance System on the determination of coverage limits.

The IADI Core Principle No. 8 on coverage limits specifically requires that the thresholds should be limited, credible with the capacity to fully cover substantial majority of bank depositors while the rest remain exposed to ensure market discipline. Deposit insurance coverage should also be consistent with the deposit insurance system’s public policy objective.

In addition, the coverage limits are not designed to be static but subject periodic reviews to ensure that they are consistent with the public policy objectives of the Deposit Insurance System. The Corporation successfully reviewed upward the coverage limits from N50,000 at inception in 1989 to N200,000 in 2006 and N500,000 in 2010.

In the same vein, the Corporation invites you to note that in 2016, 2017, 2018 and 2019, the total number of accounts in the deposit money banks stood at 83.0 million; 99.1million; 112.0 million and 128.4 million respectively. Out of these numbers, the N500,000 coverage limit fully covered 99.4%;97.6%; 97.5% and97.6% of accounts, respectively. What these figures entail is that only less than 3% of accounts/depositors are not fully covered by the prevailing coverage limits. The implication of this is that in the event of failure of a bank, above 97% of depositors would be fully covered by the Corporation.

From the foregoing statistics, it could be observed that the Corporation’s deposit insurance coverage limits are not only adequate but robust enough to engender confidence in our banking system.

Distinguished participants, it has become imperative to take you through this historical and operational perspective to enable you assist the Corporation in sensitizing all our stakeholders with a view to correcting the misconception around the NDIC coverage limits.”

Hassan called on the media “to continue to support the Corporation in its resolve to fully deliver on its core mandates. On our part, we promise to keep our doors open to your suggestions and observations, while partnering with you on capacity building and other areas of mutual benefit.”