Our Finance Correspondent Stellamaries Amuwa writes from Abuja
Yes, it is said that banks play crucial roles in the development of the economy of a nation. Well regulated financial institutions as well rescues a nation because the lives and livelihoods of people come under threat when that privilege is absent.
Lets take a look at what regulatory bodies of our financial institutions like NDIC aredoing to protect depositors of deposit-taking financial institutions.
We all know that the NDIC complements the regulatory and supervisory role of the Central Bank of Nigeria (CBN), although it reports to the Federal Ministry of Finance. The NDIC also provides incentives for sound risk management in the Nigerian banking system as well as contributes to the stability of the financial system through effective supervision of insured institutions, provision of financial/technical assistance to eligible insured institutions and prompt payments of guaranteed sums and orderly resolution of failed insured institutions.
Over three decades ago, NDIC was established with the primary objective which includes supervising insured financial institutions, resolving distressed banks and ensuring orderly resolution in the event of bank failure. In the discharge of their role the NDIC began the payment of the insured deposits of Five Million Naira (N5m) maximum per depositor within a record time of four days the bank closure was achieved using Bank Verification Numbers (BVN).
Meanwhile, this approach enabled the payment of 84.98% of depositors with BVN-linked accounts to date. This payment actually was apt as NDIC has also increased the deposit insurance coverage from N500,000 to N5,000,000 in deposit money banks which cushioned negative impact of bank failure during this challenging economic season.
According to the Managing Director, NDIC, Mr. Bello Hassan during his keynote address in the recently concluded NDIC Business Editors and Finance Correspondents Association of Nigeria (FICAN), workshop which held in Lagos with the theme: “StrengtheningNigerias’s financial Safety-net. Hassan noted that the theme was apt especially in the light of the ever-evolving dynamics of global financial system and its implications for Nigeria. “As our financial system continues to evolve and face new challenges, the NDIC remains steadfast in its mission to protect depositors and collaborate with Central Bank of Nigeria (CBN) in ensuring the stability of banking sectors, which is critical to development of the economy”
NDIC has been at the top of its game and played excellently, it has made sure depositors are protected and their funds are reimbursed on good time.
Moreso, the recent closure of Heritage Bank following the revocation of its license by CBN on June 3, 2024 underscores NDIC critical role in safeguarding depositors.
What more can be said, the media has a role to play in the society by acting as a watchdog and in a statement issued by the Corperations Managing Director, it emphasized the important role of the media and civil society organizations aalong side corporate affairs managers of banks ” in advocating for the effective implementation of the deposit insurance system. Through your efforts the achievements of the NDIC have become visible and better understood, reinforcing the Corporation’s enduring impact in contributing to the stability of the financial system, by working together we continue to build a more resilient financial system that protects the interests of all shareholders.”
