The Nigeria Deposit Insurance Corporation (NDIC) has implemented a significant increase in deposit insurance coverage for all licensed deposit-taking financial institutions across the country, effective immediately. The announcement was made by Mr. Bello Hassan, Managing Director/Chief Executive of the corporation, during a press briefing held in Abuja yesterday.
The expanded coverage applies to a range of financial institutions, including Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Primary Mortgage Banks (PMBs), Payment Service Banks (PSBs), and Mobile Money Operators (MMOs).
Mr. Hassan outlined the key increases in deposit insurance coverage as follows:
– Deposit Money Banks (DMBs) now enjoy a coverage increase from N500,000 to N5,000,000, ensuring full coverage for 98.98 per cent of depositors, compared to the previous 89.20 per cent.
– Microfinance Banks (MFBs) witness a rise in coverage from N200,000 to N2,000,000, offering full protection for 99.27 per cent of depositors, up from 98.76 per cent. This increase also significantly enhances the value of covered deposits, rising from 14.38 per cent to 34.43 per cent of total deposits.
– Primary Mortgage Banks (PMBs) see their maximum coverage elevated from N500,000 to N2,000,000, ensuring full protection for 99.34 per cent of depositors, compared to the previous 97.98 per cent. This adjustment also amplifies the value of covered deposits, increasing from 10.77 per cent to 21.04 per cent of total deposits.
– Payment Service Banks (PSBs) experience an increase in coverage from N500,000 to N2,000,000, providing near-complete protection (99.99 per cent) for depositors.
The move by the NDIC to enhance deposit insurance coverage across various financial institutions aims to bolster confidence in the banking system and safeguard the interests of depositors. It reflects the corporation’s commitment to promoting financial stability and ensuring the resilience of Nigeria’s financial sector amidst evolving economic landscapes.
Stakeholders and industry experts view this development as a positive step towards enhancing financial inclusivity and reinforcing trust in the banking system, particularly among small depositors and marginalized segments of society. The increased coverage is expected to provide a safety net for depositors, thereby fostering a conducive environment for savings mobilization and investment growth in the country.
