2019: NDIC budgets N259 billion for depositors of liquidated banks


The National Deposit Insurance Corporation (NDIC) has set aside about N258.8 billion in the 2019 budget for the reimbursement of depositors who may be affected should any licensed bank be liquidated this year.

The Managing Director/Chief Executive of NDIC, Umaru Ibrahim, disclosed this to the House of Representatives Committee on Insurance and Actuarial Matters while defending the Corporation’s 2019 budget estimates.

Mr Ibrahim said a breakdown of the funds included about N109.686 billion provided for depositors of Deposit Money Banks (DMBs), while about N149.081 billion will go for depositors of Primary Mortgage Banks (PMBs) and Micro Finance Banks (MFBs).

The estimates, he said, were consistent with the Corporation’s mandate of providing financial guarantee to depositors of failed banks towards promoting public confidence in the banking sector.

He said the provision of the fund was critical to the sustenance of the stability of the entire financial system.

The NDIC boss said in fulfilment of the Corporation’s mandate to provide technical assistance to licensed banks, it collaborated with the Central Bank of Nigeria (CBN) to invest in the acquisition of a new software called the Integrated Regulatory Solution (IRS).

He said the software is to make for a more robust surveillance and supervision of insured financial institutions in the country.

According to Mr Ibrahim, the software would enable DMBs generate real time online data among themselves, help regulators to access data online from the DMBs.

Besides, he said the National Association of Microfinance Banks Unified Information Technology Platform (NAMBUIT) was introduced by CBN/NDIC and Association of MFBs to enhance the operational capacity of the MFBs.

He said the CBN/NDIC are financing the project in the ratio of 60:40 per cent respectively in view of the importance of the project to the growth of the MFB sub-sector.

On NDIC’s mandate of providing financial assistance to eligible licensed and insured banks, Mr Ibrahim said a total of N140 billion was provided for Deposit Money Banks.

Another N300 million was provided for Microfinance and Primary Mortgage Banks.

He urged the banks to take advantage of the opportunity to access the funds offered by the Corporation whenever they are required.

The Chairman of the committee, Olufemi Fakeye comm ended the Corporation for its pro-activeness in the prevention systemic crisis in the nation’s banking system.

He said the various mechanisms adopted by the Corporation since inception to resolve distress in banks had not only prevented the manifestation of crisis in the system, they also contributed immensely to the high level of public confidence experienced in the financial sector.

The Chairman acknowledged the critical role NDIC has to play towards maintaining financial system stability, saying this has carved a niche for itself as the leading Deposit Insurer in Africa.

Mr Fakeye recalled the special role played by the NDIC in the resolution of the defunct Skye Bank and the establishment of Polaris Bank Limited as a bridge bank.

He charged the NDIC to continue to be more pro-active in detecting and addressing distresses in banks as a way of sustaining public confidence in the country’s financial system.



Please enter your comment!
Please enter your name here