Nigeria Deposit Insurance Cooperation Says Rigorous Regulation Needed in Banking Sector

The Nigeria Deposit Insurance Corporation (NDIC), has said that rigorous regulation is needed in the banking sector for it to play an effective role in the economy.

The Managing Director/Chief Executive of NDIC, Bello Hassan, during a retreat yesterday in Abuja for members of the senate committee on banking, insurance and other financial institutions, pointed out that the sector should undergo more regulation than any other sector in the economy through prudential guidelines and set ratios or thresholds  to gauge the performance of banks with a view to ensure their safety and soundness.

“Banks can only effectively perform their role in the economy when they are healthy, safe and sound, and as such expected to be highly liquid, adequately capitalized, with high quality assets and robust risk management systems at all times. This is why the banking sector is exceptionally important for more rigorous regulation than any other sector in the economy.” The determination of compliance and performance is done through On-Site Examination and Off-Site surveillance which are the focus of discussion in this special retreat.”

Hassan noted that the corporation has continued to collaborate with other key stakeholders to strengthen regulatory and supervisory frameworks in the sector to promote confidence and ensure safety and stability of Nigeria’s banking sector, adding that steps are being taken to protect depositors, in line with its mandate.

He added that it has commenced supervisory measures for digital banks, as well as the enhancement of existing consumer protection measures relating to digital deposits by enhancing collaboration with other safety net players.

While applauding the commitment and support of the national assembly, he said it would continue to engage and cooperate with all relevant key stakeholders to address issues for the sustenance of the safety and stability of the banking system.