The Nigeria Deposit Insurance Corporation (NDIC) has introduced significant adjustments to the maximum deposit insurance coverage levels across various sectors of the banking industry, aiming to fortify depositor protection and bolster financial stability.
During a press conference led by the MD/CEO of NDIC, Mr. Bello Hassan, on May 2, 2024, the revised insurance coverage details were unveiled, signifying a proactive step towards enhancing depositor confidence and promoting financial inclusion.
Key Amendments to the Insurance Coverage:
1. Deposit Money Banks (DMBs): The maximum deposit insurance coverage for DMBs has surged from N500,000 to N5,000,000, ensuring comprehensive protection for 98.98% of depositors, a notable increase from the previous 89.20%.
2. Microfinance Banks (MFBs): Coverage for MFBs has been elevated from N200,000 to N2,000,000, extending protection to 99.27% of depositors, compared to the previous 98.76%.
3. Primary Mortgage Banks (PMBs): PMBs will now offer coverage of up to N2,000,000, up from N500,000, safeguarding 99.34% of depositors, an increase from 97.98%.
4. Payment Service Banks (PSBs): The insurance coverage for PSBs has been adjusted from N500,000 to N2,000,000, providing comprehensive protection to nearly all depositors at 99.99%.
5. Mobile Money Operators (MMOs): Pass-through deposit insurance for MMO subscribers has been substantially raised to N5,000,000 per subscriber, enhancing the safety net for mobile money users.
Mr. Hassan emphasized that the revised coverage framework reflects a strategic equilibrium between safeguarding depositors’ interests and fortifying the resilience of the financial system. By expanding coverage to a larger segment of the population, the changes aim to foster financial inclusivity and mitigate the potential destabilizing effects of bank runs.
The introduction of these revised insurance coverage levels underscores NDIC’s commitment to proactive risk management and ensuring the integrity and stability of Nigeria’s banking sector.
