The Managing Director/Chief Executive Officer of the Nigeria Deposit Insurance Corporation (NDIC), Bello Hassan, has disclosed that only 25 per cent of the value of customers’ deposits are insured by the corporation.
Hassan made this revelation during the 2024 Sensitisation Seminar for justices of the Court of Appeal in Lagos, themed ‘Building Strong Depositors Confidence in Banks and Other Financial Institutions through Adjudication’.
Addressing concerns about the recent hike in deposit insurance coverage for banks, Hassan explained the rationale behind the increase.
”The review was necessary to ensure adequate and credible coverage, considering factors such as average deposit, inflation, GDP per capita, and exchange rate,” he stated.
While acknowledging that the NDIC covers about 98 per cent of depositors, Hassan emphasized that in terms of value, only 25 per cent of deposits are covered.
He also reiterated the importance of leaving a portion of deposits uninsured to mitigate moral hazard risks.
Hassan further pointed out that a small fraction of depositors controls a significant portion of the deposit value, indicating a skewed distribution.
”This distribution addresses concerns of moral hazards effectively,” he noted.
Hassan stressed the critical role of the judiciary in addressing banking matters, calling for enhanced collaboration among stakeholders.
He urged the Court of Appeal to consider implementing a practice direction for failed bank matters to expedite the resolution process.
Responding to the NDIC’s remarks, the Presiding Justice of the Court of Appeal, Lagos Division, Jimi Bada, assured of the judiciary’s readiness to handle issues arising from bank recapitalization exercises promptly.
Recall that last month, NDIC took a significant step in its commitment to combating corruption by inauguring its Anti-Corruption and Transparency Unit.
During the ceremony held at the NDIC headquarters in Abuja, Hassan underscored the corporation’s zero-tolerance policy towards corruption, emphasizing its core values of teamwork, respect, fairness, integrity, professionalism, and passion.
”The inauguration marks a significant milestone in the NDIC’s ongoing commitment to fighting corruption and enhancing transparency in its operations,” he stated.
