In a report by The Guardian Newspaper on 3rd May, 2024, Nigerians were informed about the elevation of the deposit insurance ceiling in Nigeria for the Deposit Money Banks (DMBs), Primary Mortgage Banks (PMBs), Micro Finance Banks (MFBs), and Payment Service Banks (PSBs).
The deposit insurance coverage for the DMBs is raised from 500,000 Naira to 5,000,000 Naira which now covers 98.98 percent of the depositors; a 900 percent rise from the last insurance coverage ceiling which covered 89.2 percent. MFBs and PMBs had an increase of 200,000 Naira to 2 million Naira, and 500,000 Naira to 2 million Naira respectively. PSBs like PMBs had a rise from 500,000 Naira to 2 million Naira only.
The limit of the deposit risk insurance coverage was raised because of the recent bank failures in the United States of America and Switzerland which were capable of leading to bank runs and instability in the financial sector of Nigeria.
The Managing Director and the Chief Executive of the Nigerian Deposit Insurance Corporation, Hassan Bello announced that the increase in the deposit insurance ceiling is with immediate effect, while disclosing that the rise is covered by the Corporation's current funding which is the balances in the Deposit Insurance Funds (DIFs).
It suffices to say here that NDIC is an independent agency of the Federal Government of Nigeria with the mandate to implementing the Deposit Insurance Scheme (a risk minimising scheme) including deposit insurance, bank supervision, failure resolution, and bank liquidation. They pay depositors up to a maximum amount covered (now 5 million in DMBs), in the case of bank failures.
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