By Matthew Denis Abuja
In a bid to ensure safety of the Financial institutions in the country, the Nigerian Deposit Insurance Corporation (NDIC) provides deposit insurance for 33 Deposit Money Banks (DMBs), 882 Microfinance Banks, 34 Primary Mortgage Banks (PMBs), three Payment Service Banks (PSBs) and 29 Mobile Money Schemes.
The Managing Director and Chief Executive Officer of the Corporation, Mr. Bello Hassan made the disclosure at the International Association of Deposit Insurers (IADI) Africa Regional Committee (ARC) Workshop held in Abuja on Tuesday.
He said, “In Nigeria, the NDIC provides deposit insurance protection to depositors of 33 Deposit Money Banks (DMBs) which are made up of 24 Commercial Banks, Six Merchant Banks, Three Non-Interest Banks (NIBs) and 882 Microfinance Banks (MFBs).
“Others are 34 Primary Mortgage Banks (PMBs), three Payment Service Banks (PSBs), and 29 Mobile Money Schemes.”
The MD revealed that as one of the resolution authorities in Nigeria they have adopted different resolution mechanisms in resolving the failure of distressed deposit-taking financial institutions in the country.
He said, “The liquidation activities of the NDIC involved 467 insured banks in-liquidation, comprising 49 DMBs, 367 MFBs, and 51 PMBs as at end-December 2021.”
Mr. Hassan noted that the successes recorded by the NDIC in the execution of its mandate would not have been possible without the strong support and collaborative efforts of other financial safety-net players in Nigeria like the CBN, the Federal Ministry of Finance, Budget and National Planning and other members of the FSRCC.
He said, “The Corporation is a member of the FSRCC, an inter-agency body set-up to coordinate the supervision of financial institutions and deal with matters of common interest and concern to the various regulatory and supervisory
authorities in the Nigerian financial services industry.
“At the global level, the NDIC has continuously improved on its collaborative efforts and capacity building in achieving its mandate even in turbulent economic periods. The NDIC had engaged with relevant stakeholders by executing various Memorandum of Understandings (MoU) with other deposit insurance agencies, learning from publications/Guidance Notes of IADI and related institutions, exchange of technical assistance, sponsorship of attachment programmes and training programmes.”
According to him the theme for this year’s ARC Workshop which is “Normality in Turbulent Periods: The Stabilizing Role of Deposit Insurance” was carefully chosen, considering the current and emerging developments in the global financial landscape with a special focus on Africa.
“Presently, economies globally are stressed as some are still recovering from the impact of COVID-19 pandemic and the spill-over effects of the Russia-Ukraine war. As we are all aware the fabric of the global financial stability is constantly being threatened by one form of crisis or the other.
“The potential threats at present, include the Russia-Ukraine war, cyber threats posing increasing risks to financial institutions, slow growth, increasing inflation and tighter global financial conditions which may all exacerbate pre-existing vulnerabilities.
“Growing financial inter-connectedness has shown that banking crisis can have contagion effects. A system-wide approach to crisis management, involving collaborative efforts of the financial safety-net participants and regional deposit insurance Systems is therefore highly imperative.
“It is hoped that at the end of the Workshop the participants will be better equipped to discharge their functions as deposit insurers. It should be noted that competent well-informed professional and skilled staff are critical to effective execution of a deposit insurance mandate.”