NDIC, CBN collaborate to maintain healthy banking sector in Nigeria
In a proactive move to safeguard the stability of the Nigerian banking sector, the Nigeria Deposit Insurance Corporation (NDIC) and the Central Bank of Nigeria (CBN) have intensified their supervisory efforts.
The joint initiative aims to keep the non-performing loan (NPL) ratio within acceptable limits, ensuring the sector’s continued resilience amid economic challenges.
The Managing Director of NDIC, Bello Hassan, shared insights into this supervisory collaboration during a legislative retreat focused on “Deepening Deposit Insurance Knowledge for Effective Legislative Functions.”
Hassan highlighted the sector’s robustness, noting that despite facing significant headwinds, the banking industry has managed to withstand the pressure, maintaining an NPL ratio below the CBN’s prescribed threshold.
The retreat served as a platform for NDIC to educate lawmakers on the intricacies of deposit insurance and to discuss potential barriers to the corporation’s mandate.
It also provided an opportunity for strategic discussions on enhancing the quality of risk assets through improved supervision and surveillance. Hassan emphasised the importance of cooperation between regulatory bodies and the legislative arm in addressing risks within the banking sector.
The NDIC MD maintained, “Various measures are being put in place by the corporation and the CBN to ensure the banking sector remains sound and to ensure heightened surveillance to ensure that the quality of risk assets remains very robust.”
The Chairman, Senate Committee on Banking, Insurance and Other Financial Institutions, Mr Mukhial Abiru, in his response, said the lawmakers would support the NDIC in its oversight functions, lamenting that the depreciation of the naira has had an impact on the balance sheets of banks.
He said, “The role of the NDIC is very important, the bank’s ratios are very good today, their liquidity ratio is very good and our understanding is that the average is about 41 percent when the required minimum is about 30 percent.”
