What is the major mandate of the Nigerian Deposit Insurance Corporation (NDIC)? It is to protect bank customers’ funds in the event of failure, NDIC’s Deputy Director of Research, Mr. Kingsley Nwaigwe, has said.
Nwaigwe, who spoke at a sensitisation workshop for corps members in Keffi, the Nasarawa State capital yesterday, said it was “more reasonable to protect the vulnerable savers than protecting a few”.
He added that the protection became necessary to engender confidence in the financial system and cushion the effect of any failure on ordinary Nigerians, as against shareholders, who usually own banks and earn returns on their investment.
“We are here to inform and educate our enterprising youths on the need to imbibe banking culture. To tell you that even with the stipend your parents give you and what you are getting from your employer now, which is the Federal Government, you can still make savings.
“The NDIC has a mandate as a deposit insurer and liquidator of failed banks wherein we give between maximum of N500,000 to each depositor of commercial banks and N200,000 to each depositor of micro-finance and primary mortgage banks in the event of their bank’s failure. It is pertinent to say that this coverage limit currently covers over 95 per cent of bank depositors in the country,” Nwaigwe said.
He added that depositors who have in excess of deposit insurance cover would be paid their balance in form of liquidation dividends upon the realisation of a closed bank assets.
All the depositors of 15 banks, which failed in the past, have been paid their full deposit, the deputy director said.
He listed slow judicial process, bureaucracy and ignorance of deposit insurance among the populace and on the part of some bankers as some of the challenges of maximizing the benefits deposit insurance system in Nigeria.
Nwaigwe, who spoke after a presentation of a play by corps members showing the dangers of keeping money under the pillows, also warned against the “patronage of wonder banks which promises more and deliver nothing”.
“When a financial house masquerading as banks ask you to save money and get for instance, 17 per cent, you should be weary and refuse to fall prey to fraudsters,” he warned.
He added that the reviewed Decree 22 of 1988, which established the agency, empowered it to protect depositors who patronise commercial banks, micro-finance banks, primary mortgage banks, merchant banks and the non-interest banks, licensed by the CBN as against illegal fund managers.